Digital economy and environmental sustainability: How does ICT affect ecological footprint and what is the role of economic complexity?

Abstract In the current era of digital economy, the role of information communication and technology and economic complexity are important for controlling environmental unsustainability and formulating policies to deal with ecological concerns. To inspects the impact of ICT and economic complexity on ecological footprint in G-seven (digital economies) countries from 2001–2018, in the current study we perform first generation as well as second generation unit root testing methods. Findings of both Pesaran’s and B&P’s cross-sectional dependence testing approaches confirms the presence of cross-sectional dependence across all G-seven economies. The empirical findings of cointegration (Pedroni and Kao) tests verify and stable long-run association between ecological footprint, ICT-import, ICT-export, economic complexity, economic growth and other control grouped variables. The empirical evidence obtained from Fully-Modified OLS model suggests that ICT export economic complexity, and economic growth enhance the intensity of ecological footprint, while ICT import, research and development (RD), and trade are helpful to reducing ecological footprint in G-seven economies. These empirical findings obtained from Fully-modified OLS models are also verified by Pooled Mean Group-ARDL(PMG-ARDL) methodologies and confirm that there is no inconsistency in the results. On the basis of these results, some policy implications for ecological footprint, ICT, and economic complexity are discussed.