Assessing the potency of environmental regulation in maintaining environmental sustainability in MENA countries: An advanced panel data estimation

Since there is only one planet available for humanity, efforts are being made from different quarters to ensure its sustainability. One of such efforts is the enactment of environmental regulations (ER). The effectiveness of such regulations in mitigating pollution is shrewd in obscurity, especially in developing/emerging economies. This study focuses on the impact of ER, trade, economic growth, and energy consumption on the ecological footprint (EF) in the Middle East and North Africa (MENA) countries using advanced panel data econometric techniques that consider heterogeneity and cross‐sectional dependence. Thus, we applied second‐generation unit root tests to explore the unit root properties of the variables. To examine cointegration between the variables, we apply the Westerlund's (Westerlund, Oxford Bulletin of Economics and Statistics, 2007, 69, 709–748) approach. The empirical results show the presence of cross‐sectional dependence and cointegration between EF and its determinants. Further findings confirm that ER has no significant influence on EF. This suggests that ER in MENA is not yet at a desirable level where it can effectively enhance environmental sustainability. ER contributes to maintaining environmental quality (significantly) only in Bahrain and Israel. Trade, economic growth, and energy consumption increase EF. The causality test reveals that economic growth is actually energy dependent in MENA. The directions for future research have been proposed. The limitations of the study and relevant policy directions are highlighted.