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How do natural resources, digitalization, and institutional governance contribute to ecological sustainability through load capacity factors in highly resource-consuming economies?

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  • Ni, Zehua
  • Yang, Jingyi
  • Razzaq, Asif

Abstract

Amid rising environmental concerns, resource consumption has become a critical concern for all. Swift economic growth primarily relies on high resource consumption, which is significantly accountable for the imbalance between biodiversity and ecological footprint, resulting in minifying load capacity factor (LCF). Therefore, researchers and policymakers seek ways to enhance the LCF in this contemporary era without affecting economic growth. In the same pursuits, this study investigates the role of natural resources, digitalization, governance, and economic growth in improving the LCF of high-resource-consuming economies from 1996 to 2019. This study applies the Cross-Sectional Augmented ARDL model to address cross-sectional dependency and slope heterogeneity. The long-run results reveal that reliance on natural resources and economic growth reduced LCF, while digitalization and good governance improved LCF. Likewise, the short-run results offer consistent results but lower in magnitude. Similar results are endorsed using alternative estimators and offer relevant policy implications.

Suggested Citation

  • Ni, Zehua & Yang, Jingyi & Razzaq, Asif, 2022. "How do natural resources, digitalization, and institutional governance contribute to ecological sustainability through load capacity factors in highly resource-consuming economies?," Resources Policy, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:jrpoli:v:79:y:2022:i:c:s0301420722005116
    DOI: 10.1016/j.resourpol.2022.103068
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