Digital Economy and Environmental Sustainability in MENA Region: The Role of ICT and Economic Complexity
DOI:
https://doi.org/10.47654/v30y2026i4p85-108Keywords:
Ecological Footprint, Economic Complexity, ICT Exports, GDP per Capita, Population Density, Foreign Direct Investment, ICT Imports, Sustainable Development, MENA RegionJEL Classifications:
Q56, O13, F63Abstract
Purpose – This paper investigates the determinants of the ecological footprint in the Middle East and North Africa (MENA) region over the period 1995–2023. It focuses on examining the roles of economic complexity, ICT exports, GDP per capita, population density, foreign direct investment, and ICT imports in shaping environmental pressures within a short-run and contemporaneous analytical framework.
Design/Methodology/Approach – The study employs a panel data approach based on stationary transformations of the variables to ensure econometric validity and avoid spurious regression. The empirical analysis is conducted using Fixed-Effects (FEM), Random-Effects (REM), Pooled OLS, and Mixed-Effects Generalized Linear Model (GLM) estimators. These complementary models allow for the examination of short-run dynamics while accounting for heterogeneity and cross-sectional dependence across countries.
Findings – The results indicate that ICT exports consistently contribute to reducing the ecological footprint, highlighting the role of technological advancement in improving environmental sustainability. Economic complexity shows mixed effects across model specifications, reflecting transitional dynamics in structural transformation. In contrast, GDP per capita emerges as a strong and robust driver of ecological pressure, while population density contributes to environmental strain in several cases. Foreign direct investment (FDI) and ICT imports do not exhibit statistically significant effects, suggesting that their environmental impact depends on contextual factors such as institutional quality and absorptive capacity.
Implications – The findings suggest that MENA policymakers should promote ICT exports, digital infrastructure, and green technological upgrading as tools for reducing ecological pressure. At the same time, economic growth strategies should be accompanied by environmental regulation, sustainable urban planning, and green investment policies to prevent short-run income growth from increasing ecological degradation.
Originality/Value – This study contributes to the literature by providing a consistent econometric framework based on stationary panel estimations, avoiding reliance on cointegration-based methods in the presence of mixed integration orders. It offers new insights into the short-run relationships between digital transformation, economic structure, and environmental sustainability in the MENA region, a context characterized by rapid economic growth and technological change.
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