Nonlinear effects of globalization and remittances on ecological footprint in India

Abstract

This study investigates the impact of globalization and remittances on the ecological footprint in India from 1975 to 2022, testing for U-shaped and inverted U-shaped EKC dynamics. To ensure robustness, we employ the Autoregressive Distributed Lag (ARDL), Fully Modified Ordinary Least Squares (FMOLS), and Dynamic Ordinary Least Squares (DOLS) estimators to analyze both short- and long-run dynamics while addressing issues of endogeneity and serial correlation. In addition, we utilize Wavelet Transform Coherence (WTC) analysis to capture time–frequency co-movements and reveal the evolution of these dynamics over time. Our results indicate U-shaped relationships for both globalization and remittances: initially, increased integration and remittance inflows reduce the ecological footprint, reflecting improvements in environmental quality through technology diffusion, trade efficiency, and productive investment. However, beyond specific thresholds, further globalization and higher remittance inflows exacerbate environmental degradation due to intensified consumption, energy use, and industrial activity. These findings provide country-specific evidence for India, demonstrating the context-dependent and nonlinear effects of economic integration and external financial inflows on environmental outcomes. The study underscores the importance of designing policies that leverage globalization and remittances to promote sustainable development while mitigating their potential adverse ecological impacts.