Unveiling the Nexus Between Economic Complexity and Environmental Sustainability: Evidence from BRICS-T Countries

TL;DR

This paper investigates how economic complexity influences environmental performance in BRICS-T countries, finding that higher complexity improves environmental outcomes while growth and energy use tend to harm it.

Contribution

It provides empirical evidence linking economic complexity to environmental sustainability, using robust panel data methods across multiple countries and years.

Findings

Economic complexity positively impacts environmental performance.

Economic growth and energy intensity negatively affect environmental performance.

Renewable energy use enhances environmental performance.

Abstract

This study analyses the impacts of economic complexity on environmental performance in BRICS-T countries. Annual data for the period 1999-2021, Durbin-Hausman cointegration test and Augmented Mean Group (AMG) estimator are used in the analysis. The robustness of the Panel AMG results is tested with CCEMG and CS-ARDL methods. The results indicate that economic complexity has a positive impact on environmental performance. An increase of 1% in the economic complexity index increases environmental performance in BRICS-T countries between 0.020% and 1.243%. However, economic growth, energy intensity and population density were found to have a negative impact on environmental performance. Renewable energy use, in contrast, contributes positively to environmental performance.