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

Author

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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)

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.

Suggested Citation

  • Talal H. Alsabhan & Muhammad Tahir, 2024. "The Moderating Role of Income on the Complexity–Sustainability Nexus: Evidence from BRICS Members," Sustainability, MDPI, vol. 16(23), pages 1-12, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10171-:d:1525938
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    References listed on IDEAS

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    1. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
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    3. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    4. Balsalobre-Lorente, Daniel & Ibáñez-Luzón, Lucia & Usman, Muhammad & Shahbaz, Muhammad, 2022. "The environmental Kuznets curve, based on the economic complexity, and the pollution haven hypothesis in PIIGS countries," Renewable Energy, Elsevier, vol. 185(C), pages 1441-1455.
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