Trade openness, globalization, and natural resources management: The moderating role of economic complexity in newly industrialized countries

Enhancing resource efficiency is the primary concern for industrialized countries. Climate susceptibility motivates the development and identification of resource efficiency drivers. Although the existing literature is evident on the factors influencing resource consumption, the role of economic complexity and trade openness is under-explored. Therefore, the study anticipates the short and long-run impact of trade openness, economic complexity, economic growth, and globalization in newly industrialized countries (NICs) from 1990 to 2019. The study utilized the Cross-section Augmented Autoregressive Distributed Lag (CS-ARDL) model to overcome the concerns of cross-section dependence and slope heterogeneity along with the Augmented Mean Group estimates to validate the outcomes. The results reveal that trade openness, globalization, and economic growth are negative, while economic complexity positively affects the material footprints in the NICs. The moderation effect of trade openness and economic complexity significantly affects resource consumption in the long run, whereas its effect is negligible in the short run. These findings signify that trade in industrialized countries is responsible for the excessive usage of materials in the region; however, resource depletion is meticulous if industrial processes are augmented with complex products. The findings imply that economic complexity neutralizes the negative consequences of globalization and revising the trade policies in the newly industrialized region could help to reduce resources consumption.