Policy Implications of Green Technology Innovation and Natural Resources on Ecological Footprint: Evidence from NAFTA via Novel Fourier-Based Analysis

Abstract

This study aims to examine the environmental impacts of economic growth, green technology innovation, and natural resources, particularly the ecological footprint across NAFTA countries, for the period 1981–2019, from a robust econometric perspective. Utilizing novel Fourier ADL and Fourier-frequency Toda-Yamamoto frameworks to account for structural shifts, the long-run estimates reveal that economic growth and natural resource abundance exert a positive and significant influence on the ecological footprint. Conversely, green technology innovation is found to significantly mitigate environmental degradation. The causality analysis uncovers country-specific dynamics: a unidirectional causality from economic growth to the ecological footprint in Canada, from ecological footprint to the economic growth in Mexico, and a bidirectional relationship in the USA. Furthermore, bidirectional causality is observed between green technology and the ecological footprint in Canada, whereas a unidirectional causality from green innovation to the footprint in Mexico. Across the entire NAFTA countries, a bidirectional causality persists between natural resources and the ecological footprint. The policy focus should shift from managing the balance between growth and the environment to creating synergy through radical technological innovation. © 2026 the author(s), published by De Gruyter, Berlin/Boston.