The Moderating Role of Income on the Complexity–Sustainability Nexus: Evidence from BRICS Members

Talal H. Alsabhan and Muhammad Tahir ()
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Talal H. Alsabhan: Department of Economics, College of Business Administration, King Saud University, P.O. Box 173, Riyadh 11942, Saudi Arabia
Muhammad Tahir: Department of Economics, COMSATS University Islamabad, Abbottabad Campus, Abbottabad 22060, Pakistan

Sustainability, 2024, vol. 16, issue 23, 1-12

Abstract: This research paper explores the relationship between economic complexity and environmental degradation by highlighting the moderating role of income level. The paper focuses on the BRICS member economies “Brazil, Russia, India, China, South Africa” and utilizes data for the period 1998–2022. Several suitable econometric estimators such as “Fixed Effects (FE)”, “Feasible Generalized Least Squares (FGSL)”, and “Two Stages Least Squares (2SLS)” are used to obtain results. The main findings show that economic complexity degrades the quality of the environment significantly. However, the results further indicated that income level helps the economic complexity to improve environmental quality. Moreover, the results also revealed that trade openness, income level, and energy use have also significantly degraded the quality of the environment. The causality analysis performed demonstrated a one-way causal relationship running from economic complexity to environmental degradation. Our results have important policy implications for the policymakers of the BRICS economies.

Keywords: economic complexity; environmental degradation; income level; BRICS (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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