Impact of fiscal policies and natural resources on ecological sustainability of BRICS region: Moderating role of green innovation and ecological governance

Hongmei Li and Ruizhe Xu

Resources Policy, 2023, vol. 85, issue PB

Abstract: Due to the alarming rate of ecological erosion and deficits, worldwide economies are keen to investigate the factors that can assist in limiting the environmental challenges for future resource conservation and sustainability. However, scant attention has been observed in empirical studies to evaluate the effect of fiscal policy and natural resources on the ecological footprint (EF). This study examines the dynamic influence of fiscal policy, natural resources, stringent environmental policy, and green technologies on EF in the BRICS countries from 1990 to 2020. The study employed the cross-section autoregressive distributed lag (CS-ARDL) estimator in addressing the slope heterogeneity and cross-section dependency issues. The outcomes reveal that fiscal policy and natural resources rent instigate the EF significantly, while ecological policy stringency and green innovations substantially mitigate the EF. Moreover, green innovations inhibit the EF levels prominently if the economies are embodied with strict governance regulations. The moderating variable substantially impacts EF more than the other model variables. In addition, the significant negative value of the co-integrating term converges the model towards the long-run equilibrium in case of any disturbance. The short-run findings concurred with long-run estimations; however, they are smaller in magnitude. The overall study's findings recommend relevant policy suggestions to all stakeholders.

Keywords: Fiscal policies; Natural resources; Green innovations; Environmental governance; Ecological footprint; BRICS (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:85:y:2023:i:pb:s0301420723007109

DOI: 10.1016/j.resourpol.2023.103999

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