The potency of natural resources on ecological sustainability in PIIGS economies

The current study assesses nonlinear/asymmetric influences of natural resources (NR) on the ecological footprint (EF) at both the lower and higher tails for the case of PIIGS countries (Portugal, Ireland, Italy, Greece, and Spain) using quarterly data between 1970 and 2018. The PIIGS grew in popularity during the 2008 eurozone financial downturn, alluding to the nations impacted the hardest by the crisis. The study utilizes the sophisticated “quantile-on-quantile (QQ)" technique initiated by Sim and Zhou (2015) which can estimate the dependence of the time series in each nation individually to offer country-specific indication for the interrelationship between the series. Furthermore, we utilize the quantile causality proposed by Troster et al. (2018) to identify the causal association between series at the lower and higher tails of the data distribution. The outcomes of the quantile cointegration revealed the long-run association between NR and EF in each sample country. Moreover, the results from the QQR disclosed that NR impacted EF negatively in Greece, Portugal, Ireland, and Spain across most of the quantiles. In contrast, positive connections between EF and NR surfaced in most of the quantiles for the case of Italy. Furthermore, the quantile causality revealed bidirectional causality between EF and NR for the PIIGS nations across major quantiles. This demonstrates that any policy initiated on NR will have a substantial but heterogeneous effect on EF and vice versa in the PIIGS countries.