Impact of Political Risk on Ecological Footprint in Iran: Multiple Asymmetric Thresholds NARDL (MATNARDL) Approach

The primary objective of this research is to examine the symmetrical and non-linear impact of political stability on the environmental quality in Iran from 1990 to 2020. For this purpose, the model estimation has been conducted using the Multiple Asymmetric Thresholds NARDL (MTANARDL). The results of the MATNARDL estimator show that both short-term and long-term positive shocks in the political risk index have a significant and positive impact on the ecological footprint. This effect is observed in both small-scale (quantile less than the τ30 threshold) and medium-scale (quantile between the τ30 and τ70 thresholds) analyses. However, when it comes to large-scale shocks (quantile less than the τ70 threshold), the effect on the ecological footprint is negative. In addition, the negative shocks of the political risk index in all three scales - small, medium, and large - do not have a significant effect on the ecological footprint in the short and long term. Based on this, it can be said that the effect of political risk on the ecological footprint in Iran is asymmetric, and only with a significant (large) increase in political stability, we can see a reduction in the ecological footprint in the country.