Lagged effect of exports, industrialization and urbanization on carbon footprint in Southeast Asia

The study aims to examine lagged causal effect of economic development policies on the carbon footprint of Southeast Asia. This study employs unit root test, cointegration test and panel data analysis methods to examine endogeneity concerns in observational data. The study applies panel data analysis methods to address unobserved country effect in the model. The balanced panel data includes a total of 240 observations with five cross sections of five nations in Southeast Asia and with 48 time-specific periods of 1970-2017. The results indicate that (1) exports, industrialization, urbanization and economic growth have lagged negative effect on the carbon footprint of the region in the short-run, and (2) there exists a long-run equilibrium relationship among exports, industrialization, urbanization, economic growth and carbon footprint in the region. The findings suggest that the economic growth, exports, industrialization and urbanization of the developing countries in Southeast Asia have been achieved at the cost of increasing the carbon footprint of the region. The findings imply that the environmental policy of the export-led growth countries never have been effective so far since the nations have achieved their economic growth at the high cost of harming the environment of the nations.