Entrepreneurship, Ecological Footprint and Adaptation to Climate Change in WEF Countries: A Panel Smooth Transition Regression Approach

Document Type : Research Paper

Authors

1 Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

2 Department of Mathematics, Faculty of Science, Bu-Ali Sina University, Hamedan, Iran

Abstract

Given the extensive impacts of climate change on human societies, this study examines the relationship between entrepreneurship, ecological footprint, and climate change adaptation. The primary objective of the research is to analyze the nonlinear effects of these variables among member countries of the World Economic Forum during the 2008-2019 period using the Panel Smooth Transition Regression (PSTR) model. The existence of a nonlinear relationship between the research variables has been confirmed through linearity testing. For each transition variable, considering two transition functions with two threshold parameters (representing a three-regime model) proved appropriate for specifying the nonlinear relationships between model variables. The results revealed that both the entrepreneurship index and ecological footprint index have nonlinear impacts on climate change adaptation. Findings indicate that nearly all countries are positioned in the second regime (efficiency-oriented), suggesting that the studied countries possess the fundamental elements required for potential transition to the third regime (innovation-oriented). Key findings demonstrate that both entrepreneurial growth and reduced ecological footprint contribute to improved climate change adaptation. Therefore, promoting the development of new technologies based on entrepreneurial activities could generate significant improvements in climate change adaptation capabilities.

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History

  • Receive Date: 23 February 2025
  • Revise Date: 20 May 2025
  • Accept Date: 24 May 2025

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