The Potency of Eco-Innovation, Natural Resource and Financial Development on Ecological Footprint: A Quantile-ARDL Based Evidence from China

Abstract

Abstract Given the alarming deterioration of the environment, the present analysis investigates the role of eco-innovation, natural resources and financial development in influencing the environmental degradation of China. Applying the novel method of Quantile-ARDL, the current research is beneficial in portraying the dependence patterns of the variables with special emphasis on the nexus of eco-innovation and ecological footprint across numerous quantiles of the distribution which has not been examined so far in the literature. The empirical findings reveal that in the long run, eco-innovation reduces the level of ecological deterioration in China across all quantiles. On the other hand, the results suggest that the increase in credit to the private sector and natural resource rents augment environmental degradation. The outcomes imply that the over-dependence on natural resources and financial development can worsen the goals of sustainable development in China if the strategies of conservation and management are ignored. Moreover, witnessing the favourable role of eco-innovation, competent policies and regulations can be made towards sustainable efficient technologies and eco-friendly energy sources to halt global warming.