DIGITALIZATION, ECONOMIC COMPLEXITY, AND THE ECOLOGICAL FOOTPRINT: A PANEL ARDL ANALYSIS OF LONG-RUN AND SHORT-RUN DYNAMICS
DOI:
https://doi.org/10.54783/dpnqre80Keywords:
Digital economy, Ecological footprint, ICT trade, PMG-ARDLAbstract
This study examines the factors influencing the digital economy and ecological footprint in nine OIC Asian
economies from 2013 to 2024 by incorporating ICT trade flows, economic complexity, income levels, and trade
ratios into two PMG-ARDL models. Preliminary diagnostic tests affirm the appropriateness of a dynamic panel
approach: multicollinearity values remain beneath the VIF threshold, IPS unit root tests indicate a combination
of I(0) and I(1) variables, Pedroni’s cointegration statistics confirm long-run relationships, and cross-sectional
dependence is identified, thereby endorsing the utilization of PMG estimators. The first model shows that ICT
exports, ICT imports, and economic complexity all have big positive long-term effects on the growth of the
digital economy. On the other hand, the trade ratio has a big negative effect, which shows that structural trade
pressures are holding back digital deepening. The second model shows that ecological footprint increases with
digital economy expansion, economic complexity, and trade ratio, while higher GDP per capita reduces
ecological pressure, indicating an early transition toward more energy-efficient growth. Short-run dynamics
vary across countries but maintain overall consistency in directionality. The findings suggest that digital
transformation in emerging Islamic economies yields technological progress but simultaneously exacerbates
environmental pressures unless supported by green industrial upgrading and sustainable trade structures. The
study contributes new empirical evidence by combining the most recent dataset, focusing exclusively on OIC
Asian economies, and estimating both aggregate and country-specific effects. Policy implications emphasize
the need for eco-conscious digital strategies, selective ICT trade promotion, low-carbon technological
innovation, and integration of environmental criteria into regional economic planning. Despite data and
regional constraints, the research provides a robust analytical foundation for understanding the dual digital
ecological transition in developing Muslim-majority economies.
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