EFFECT OF ECONOMIC DIGITALIZATION ON ENVIRONMENTAL QUALITY: EVIDENCE FROM SELECTED ASIAN COUNTRIES

Abstract

Environmental changes, along with global warming and climate change, are raising concerns about environmental degradation in Asian countries. Although researchers have widely explored the relationship between the digital economy and the environment, they have not yet properly examined how the digital economy, supported by facts and verbal exchange technology, affects environmental impacts. This study aims to fill this gap by examining the relationship between the digital economic system and environmental impacts in Asian countries. Most previous studies have used carbon emissions to assess environmental satisfaction; however, this study uses environmental footprints as a measure of environmental quality, based mainly on panel data from 14 Asian countries between 2005 and 2024. The pooled OLS regression and fixed-effects model show that the digital economy significantly reduces ecological footprints and improves environmental conditions; trade openness and urban population also significantly reduce ecological footprints, but energy use, industrialization, and natural resource rent increase ecological footprints and environmental pollution. The results of the Driscoll-Kraay estimation show the individual and mixed effects of the economic digitalization.  Results show reduced environmental degradation when considering variables such as urban population and trade openness.