EXPLORING INDUSTRIALIZATION AND ENVIRONMENTAL SUSTAINABILITY DYNAMICS IN GHANA: A FULLY MODIFIED LEAST SQUARES APPROACH

Abstract

Purpose – This paper seeks to provide empirical insight into how industrialization and technology affect environmental quality in Ghana. Design/methodology/approach – Using Ecological Footprint (ECF) as a measure of environmental degradation, the authors employ annual data from World Development Indicators of the World Bank and the Global FootprintNetwork spanning from1970 to 2017 and apply the fully modified least squares (FMOLS)technique. Findings – The results reveal that industrialization has a negative significant influence on ECF, suggesting that industrialization contributes to environmental sustainability in Ghana. The authors find that technology is harmful to the environment as it has a positive significant effect on ECF. The study also documents that while education and financial development improve environmental sustainability, fossil fuel consumption exacerbates environmental degradation in Ghana. Originality/value – The environmental impact of industrialization is still being debated, with very scanty empirical evidence in the African context. Based on a detailed review of the literature, this paper provides an initial attempt to investigate the industrialization–environmental sustainability nexus in Ghana. Besides, whereas most extant studies have employed CO2 emission as a proxy of environmental degradation, the authors use ECF to gauge the level of environmental degradation which is regarded as a more inclusive metric