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Foreign Direct Investment, Technological Innovations, Energy Use, Economic Growth, and Environmental Sustainability Nexus: New Perspectives in BRICS Economies

Author

Listed:
  • Abdul Rauf

    (School of Management Science and Engineering, Nanjing University of Information Science and Technology, Nanjing 210044, China)

  • Najabat Ali

    (Faculty of Management Sciences, Hamdard University, Islamabad 45550, Pakistan
    Department of Economics, University of Religions and Denominations, Qom 13357, Iran)

  • Muhammad Nauman Sadiq

    (Faculty of Management Sciences, Hamdard University, Islamabad 45550, Pakistan)

  • Saira Abid

    (School of Public Administration, Hohai University, Nanjing 210098, China)

  • Shahzad Afzal Kayani

    (Faculty of Management Sciences, Hamdard University, Islamabad 45550, Pakistan)

  • Abid Hussain

    (Department of Commerce, Thal University, Bhakkar 30000, Pakistan)

Abstract

In the current era, economic growth is inevitable for global prosperity but achieving sustainable economic development is one of the significant challenges for the developing world. The present study explores the impacts of foreign direct investment, energy use, and technological innovations on the economic growth and environmental quality of BRICS countries for the period 1990–2018. We used the augmented mean group (AMG), the common correlated effects mean group estimator (CCEMG), and several other modern-day empirical techniques to analyze data. The findings show that foreign direct investment increases economic growth but harms the environmental sustainability of BRICS countries. Moreover, we have seen that energy use is directly proportional to economic growth and CO 2 emissions. This confirms that energy use is one of the factors which harms the environmental quality in BRICS economies. Likewise, economic growth increases CO 2 emissions. On the other hand, technology innovation has a direct relationship with economic growth but an inverse relationship with CO 2 emissions as it improves the environmental sustainability of the BRICS region. This research adds to the existing literature by exploring the interplay between FDI, innovation, energy use, economic growth, and environmental outcomes in the context of major emerging economies. The study’s findings provide empirical evidence on the role of these factors in shaping the environmental outcomes in the BRICS economies, and they have implications for policymakers and stakeholders in addressing environmental challenges such as global warming and climate change.

Suggested Citation

  • Abdul Rauf & Najabat Ali & Muhammad Nauman Sadiq & Saira Abid & Shahzad Afzal Kayani & Abid Hussain, 2023. "Foreign Direct Investment, Technological Innovations, Energy Use, Economic Growth, and Environmental Sustainability Nexus: New Perspectives in BRICS Economies," Sustainability, MDPI, vol. 15(18), pages 1-18, September.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:18:p:14013-:d:1244721
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