Kenya is classified as a low-income country, yet it has experienced steady economic growth driven by expanding trade, financial sector reforms, and increasing public expenditure. However, this growth trajectory has coincided with rising environmental pressures, raising concerns about the ecological consequences of macroeconomic dynamics. This study examines the long-run relationships between trade openness, economic globalization, public expenditure, and financial development and Kenya’s ecological footprint over the period 1990–2022. To ensure robust long-run estimations, the Fully Modified Ordinary Least Squares (FMOLS), Canonical Cointegrating Regression (CCR), and Dynamic Ordinary Least Squares (DOLS) methods are employed, complemented by Granger causality analysis to explore causal linkages among variables. The empirical findings indicate that economic globalization and public expenditure contribute to the expansion of the ecological footprint, suggesting that rapid economic integration and fiscal expansion may intensify environmental degradation. In contrast, trade openness and financial development are associated with environmental improvement, implying that increased market integration and financial deepening can support cleaner economic activities. The causality results reveal a bidirectional relationship between trade openness and the ecological footprint, while financial development demonstrates a marginal unidirectional causal effect. Furthermore, trade openness is influenced by all other explanatory variables. These findings underline the importance of aligning macroeconomic structures with environmental sustainability objectives. It should be noted that the study captures macro-level associations based on aggregate indicators rather than identifying direct causal policy effects. Policymakers may consider restructuring public expenditure toward environmentally friendly investments and adopting regulatory frameworks that guide economic integration toward more sustainable outcomes. At the same time, strengthening green financing mechanisms and promoting environmentally responsible trade practices may help mitigate ecological pressure while sustaining economic growth in Kenya.
Değirmenci et al. (Mon,) studied this question.