Analyzing the Nexus between AI Innovation and Ecological Footprint in Nordic Region: Impact of Banking Development and Stock Market Capitalization using Panel ARDL method

Authors

  • Sarder Abdulla Al Shiam Department of Management -Business Analytics, St Francis College,USA https://orcid.org/0009-0007-7032-6339
  • Mohammad Ridwan Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali-3814, Bangladesh
  • Md Mahdi Hasan Department of Management -Business Analytics, St Francis College,USA
  • Afsana Akhter Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali-3814, Bangladesh https://orcid.org/0009-0001-1748-2654
  • S M Shamsul Arefeen Master of Science in Business Analytics, University of Massachusetts Boston, United States https://orcid.org/0009-0000-0019-1482
  • Md Sibbir Hossain Department of Computer Science, The City College of New York, New York, USA
  • Shake Ibna Abir Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA https://orcid.org/0009-0004-0724-8700
  • Shaharina Shoha Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA https://orcid.org/0009-0008-8141-3566

DOI:

https://doi.org/10.56556/jescae.v3i3.973

Keywords:

Artificial Intelligence, Banking Development, Stock Market Capitalization, Ecological Footprint, Nordics Region.

Abstract

This study investigates the impact of Artificial Intelligence (AI) innovation on the ecological footprint in the Nordic region from 1990 to 2020, alongside the effects of banking development, stock market capitalization, economic growth, and urbanization. Utilizing the STIRPAT model, the study incorporates cross-sectional dependence and slope homogeneity tests, revealing issues of heterogeneity and cross-sectional dependence. The analysis employs both first and second-generation panel unit root tests, confirming that the variables are free from unit root problems. Panel cointegration tests demonstrate that the variables are cointegrated in the long run. To explore the short- and long-term relationships, the study utilizes the Panel Autoregressive Distributed Lag (ARDL) model. The Panel ARDL results indicate that economic growth, stock market capitalization, and urbanization positively correlate with the ecological footprint in both the short and long run. Conversely, AI innovation and banking development negatively correlate with the ecological footprint. To validate the Panel ARDL estimations, robustness checks are performed using Fully Modified OLS, Dynamic OLS, and Fixed Effects with OLS, all of which support the initial findings. Furthermore, the study employs the D-H causality test to identify causal relationships. The results show a unidirectional causal relationship between AI innovation, stock market capitalization, urbanization, and the ecological footprint. In contrast, a bidirectional causal relationship exists between economic growth and the ecological footprint, as well as between banking development and the ecological footprint.

Downloads

Published

2024-09-01
CITATION
DOI: 10.56556/jescae.v3i3.973

How to Cite

Abdulla Al Shiam, S., Mohammad Ridwan, Mahdi Hasan, M., Akhter, A., Shamsul Arefeen, S. M., Hossain, M. S., Abir, S. I., & Shoha, S. (2024). Analyzing the Nexus between AI Innovation and Ecological Footprint in Nordic Region: Impact of Banking Development and Stock Market Capitalization using Panel ARDL method. Journal of Environmental Science and Economics, 3(3), 41–68. https://doi.org/10.56556/jescae.v3i3.973

Issue

Section

Research Article

Most read articles by the same author(s)