Digitalization, Economic Complexity, and the Ecological Footprint: a Panel Ardl Analysis of Long-run and Short-run Dynamics
Year: 2026
Type: conference-paper
Abstract: This study examines the factors influencing the digital economy and ecological footprint in nine OIC Asian economies from 2013 to 2024 by incorporating ICT trade flows, economic complexity, income levels, and trade ratios into two PMG-ARDL models. Preliminary diagnostic tests affirm the appropriateness of a dynamic panel approach: multicollinearity values remain beneath the VIF threshold, IPS unit root tests indicate a combination of I(0) and I(1) variables, Pedroni’s cointegration statistics confirm long-run relationships, and cross-sectional dependence is identified, thereby endorsing the utilization of PMG estimators. The first model shows that ICT exports, ICT imports, and economic complexity all have big positive long-term effects on the growth of the digital economy. On the other hand, the trade ratio has a big negative effect, which shows that structural trade pressures are holding back digital deepening. The second model shows that ecological footprint increases with digital economy expansion, economic complexity, and trade ratio, while higher GDP per capita reduces ecological pressure, indicating an early transition toward more energy-efficient growth. Short-run dynamics vary across countries but maintain overall consistency in directionality. The findings suggest that digital transformation in emerging Islamic economies yields technological progress but simultaneously exacerbates environmental pressures unless supported by green industrial upgrading and sustainable trade structures. The study contributes new empirical evidence by combining the most recent dataset, focusing exclusively on OIC Asian economies, and estimating both aggregate and country-specific effects. Policy implications emphasize the need for eco-conscious digital strategies, selective ICT trade promotion, low-carbon technological innovation, and integration of environmental criteria into regional economic planning. Despite data and regional constraints, the research provides a robust analytical foundation for understanding the dual digitalecological transition in developing Muslim-majority economies.
DOI: 10.54783/dpnqre80
Institution: Sunan Gunung Djati State Islamic University Bandung
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7137988856