The Impact of Urbanization on Ecological Footprint in Developing Countries: A Smooth Transition Regression Model

Document Type : Research Paper

Authors

1 Master's Student, Department of Economics, University of Tehran

2 Phd student/tarbiat mofares

3 Associate Professor at the University of Tehran, Department of World Studies.

Abstract

Urbanization, as one of the structural trends in developing countries, plays a crucial role in shaping environmental change. This study aims to examine the impact of urbanization on the ecological footprint across 35 developing countries over the period 1990–2023. To capture the nonlinear and threshold-based relationships between variables, the Panel Smooth Transition Regression (PSTR) model was employed. This model allows for analyzing how the effects of urbanization vary across different development levels. The findings indicate that, in the initial stages, urbanization increases the ecological footprint, with a positive coefficient of 1.33. However, after crossing a specific threshold (50 million urban population), the effect reverses, leading to a decline in ecological pressure. Gross Domestic Product (GDP) shows an increasing effect (coefficient = 3.29), while trade openness has a slight negative effect (coefficient = –0.01) on the ecological footprint. The share of renewable energy exhibits a significant negative effect (coefficient = –0.67), suggesting that a higher share of clean energy can meaningfully reduce environmental stress. Moreover, the negative coefficient of the interaction term between urbanization and GDP implies that integrating economic growth with environmental policies can effectively curb ecological degradation. Overall, the results emphasize that surpassing the urbanization threshold, coupled with a shift toward renewable energy, can guide developing countries toward environmentally sustainable development.

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