Remittances, urbanization, and globalization: deciphering the environmental dynamics in Kenya

Remittances remain a vital source of income in many developing countries, particularly in Sub-Sahara Africa. Kenya is one of the largest remittance-receiving countries globally, yet empirical research on the impact of remittances on environmental sustainability remains limited, especially when analyzed alongside key development indicators such as urban population growth and economic globalization. This study aims to fill this gap by employing dynamic Ordinary Least Square (DOLS) and Fully Modified Ordinary Least Squares (FMOLS) regression techniques to assess the non-linear dynamics effect of remittances, urbanization, and economic globalization on ecological footprint within the framework of the Kuznets hypothesis in Kenya for the period 1970 to 2021. Findings reveal that both inverted U-shaped remittance-Kuznets curve and inverted U-shaped urbanization-Kuznets curve hold. In other words, in the early stages, rising remittances and urbanization contribute to environmental degradation. However, beyond a certain threshold, further increases in remittance inflows and urbanization lead to environmental improvements, likely due to investments in cleaner energy and sustainable infrastructure. Conversely, the results confirm a U-shaped globalization-Kuznets curve, where globalization initially reduces environmental impact but, beyond a threshold, exacerbates ecological footprints. Additionally, the findings indicate that the directional causality between urban population growth, personal remittances received, and the globalization index in relation to ecological footprint. Specifically, personal remittances received exhibit bidirectional causality with ecological footprint, suggesting a dynamic interplay between financial inflows and environmental outcomes. These results underscore the complex relationship between remittances, urbanization, economic globalization and environmental sustainability in Kenya, offering valuable insight for policymakers striving to balance development goals with environmental protection.