Sub-Saharan African Cross-Country Analysis of Economic Complexity and Ecological Footprint: The Quantile Regression Approach

Global South countries are in constant pursuit of economic growth, seeking to improve livelihoods. The resultant actions often cause environmental degradation, more so given the limited technology and reliance on less-efficient energy systems in this region. This phenomenon has trapped these nations in a “grow first, clean up later” hypothesis. Furthermore, these countries are often targeted as preferred destinations by multinational corporations, as these countries have weak environmental regulations, which can exacerbate the degradation. This study argues that multinational corporations act as a catalyst for knowledge spillovers and tech transfers, which then increases the level of economic complexity in these countries; thus, any environmental degradation caused is just an unintended consequence of technology transfer. Thus, this research examines the impact of economic complexity on the ecological footprint in 27 countries of sub-Saharan Africa (SSA) from 1995 to 2023, with pooled quantile regression as the method of estimation. Despite the relatively low levels of economic complexity in the region, the empirical results indicate that increased complexity improves environmental quality by significantly reducing the ecological footprint. This suggests that even though sub-Saharan African nations generally exhibit limited economic complexity, they have made meaningful progress in developing and applying more sophisticated capabilities to enhance livelihoods. Furthermore, the ecological footprint in sub-Saharan Africa remains significantly lower than those in developed countries, which helps explain why even modest increases in economic complexity can contribute to reducing environmental pressure in the region.