THE ECOLOGICAL FOOTPRINT AND TRADE OPENNESS NEXUS: A CASE OF G-7 COUNTRIES

  This study investigates the relationship between the ecological footprint and trade openness in the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the USA) using annual data from the period of 1984–2019. Utilizing advanced econometric methods such as Panel ARDL (PMG), DOLS, and FMOLS, the research demonstrates a significant positive correlation between a country's environmental impact and its level of international trade integration. Specifically, the analysis reveals that as the ecological footprint of these industrialized nations increases, their trade openness also expands in both the short and long term, with a 0.1% increase in the ecological footprint leading to approximately a 3% increase in trade openness. The findings, which are particularly pronounced in the United States, suggest that highly industrialized economies with larger environmental demands tend to adopt more open economic structures to sustain their production and consumption needs, thereby providing critical insights for policymakers and investors regarding the nexus of industrialization, environmental sustainability, and global trade.

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