Ecological footprint, economic complexity and natural resources rents in Latin America: Empirical evidence using quantile regressions

This paper analyses the environmental degradation associated with the ecological footprint in Latin America. The studied region has an important feature of less industrialization and are having high advantage of biodiversity. As ecological footprint is a comprehensive indicator of environmental deterioration because it assesses the impact of all human activities on nature. This research examines the effect of economic complexity and the natural resources rents on the per capita ecological footprint in Latin America. To assess the sensitivity of the parameters and to capture the impact of the growth in the structure of the industrial sector for the region, the study includes globalization, inequality, internal credit and trade as additional covariates. The theoretical framework comprises the Environmental Kuznets Curve (EKC) and for the methodology the quantile regression approach, proposed by Canay (2011), Powell (2016) and Machado and Santos Silva (2019), has been used in this study. The study found that the impact of economic complexity and the natural resources rents is heterogeneous throughout the distribution on the ecological footprint. It is also observed that the level of inequality for the utilization of region-specific climatic distribution of natural resources, increases the ecological footprint in the lower quantiles, while in the upper quantiles, it decreases the same. This study provides a new approach to analyze the degradation of environment in countries with high dependence on natural resources rents and highincome inequality.