THE RELATIONSHIP BETWEEN TRADE OPENNESS AND ECOLOGICAL FOOTPRINT IN TURKEY AND G7 COUNTRIES: A PANEL DATA ANALYSIS UNDER CROSS-SECTIONAL DEPENDENCE

Abstract

With the global implementation of policies encouraging liberalization in international trade at the end of the 1970s, significant increases in economic growth and openness have occurred throughout the world. However, environmental degradation was observed in the same period, so the discussions on sustainable development took its place on the agenda. The measurement of indicators of environmental degradation has gained importance to understand to what extent sustainability is achieved. As an important indicator of environmental degradation, ecological footprint has come to the fore. In this context, it is important to determine the impact and direction of openness on the ecological footprint. In this study, the relationship between ecological footprint and openness were tested by using panel data analysis, taking into account the cross-sectional dependence for the G7 countries and Turkey for the period 1998-2017. Empirical findings reveal that openness and growth increase the ecological footprint, while renewable energy consumption decreases the ecological footprint. Based on these results, policy recommendations for G7 countries and Turkey are discussed.