Determinants of ecological footprint in European countries: Fresh insight from Bayesian model averaging for panel data analysis

This study examines the determinants of the ecological footprint of production in European countries from 1992 to 2020. Using partial and semipartial correlation analyses and Bayesian Model Averaging (BMA) approach for the first time, the research identifies key variables affecting ecological footprint. Using Bayesian methods, posterior inclusion probabilities (PIPs) were calculated for each variable's coefficient estimates, revealing their relative importance. Biocapacity, energy consumption, industrialization, financial development, life expectancy, and globalization displayed notably high PIPs, indicating their strong influence on the ecological footprint. In addition, the study employs cointegration tests to examine the long-run relationship between ecological footprint and explanatory variables. The results indicate significant cointegration between these variables across panels, supported by various test statistics. In the Weighted Pooled DOLS estimation, biocapacity, energy consumption, and life expectancy significantly influence the ecological footprint, while industrialization, financial development, and globalization exert a comparatively smaller impact. Researchers and policymakers should consider these determinants for effective sustainable development planning. These findings underscore the intricate interplay of factors shaping the ecological footprint and offer insights for effective policy interventions towards sustainable development.