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Drivers of Environmental Sustainability, Economic Growth, and Inequality: A Study of Economic Complexity, FDI, and Human Development Role in BRICS+ Nations

Author

Listed:
  • Parveen Kumar

    (Department of Humanities and Social Sciences, National Institute of Technology, Kurukshetra 136119, India
    Department of Economics, NIILM University, Kaithal 136027, India)

  • Rajbeer Kaur

    (Department of Finance, New Delhi Institute of Management, New Delhi 110062, India)

  • Magdalena Radulescu

    (Department of Finance, Accounting and Economics, National University of Science and Technology Politehnica Bucharest, Pitesti University Centre, Str. Targu din Vale, No. 1, 110040 Pitesti, Romania
    Institute of Doctoral and Post-Doctoral Studies, University Lucian Blaga of Sibiu, 550024 Sibiu, Romania
    UNEC Research Methods Application Center, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku 1001, Azerbaijan)

  • Branimir Kalaš

    (Department of Economics, Faculty of Economics in Subotica, University of Novi Sad, 24000 Subotica, Serbia)

  • Alina Hagiu

    (Department of Finance, Accounting and Economics, National University of Science and Technology Politehnica Bucharest, Pitesti University Centre, Str. Targu din Vale, No. 1, 110040 Pitesti, Romania)

Abstract

This study investigates the intricate relationships among CO 2 emissions, income inequality, the Economic Complexity Index (ECI), foreign direct investment (FDI), the Human Development Index (HDI), and the economic growth across countries. Three distinct models are developed: the first examines their effects on economic growth, the second analyzes their impact on income inequality, and the third explores their influence on CO 2 emissions. Advanced econometric methods, including Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS), are employed to ensure robust and reliable results. The findings indicate that income inequality impedes economic growth, whereas economic growth and greater economic complexity help reduce inequality. While FDI significantly boosts GDP growth, it also widens the income disparities and intensifies environmental degradation, raising questions about the sustainability and quality of foreign investments. In contrast, human development emerges as a vital driver of economic growth and a critical factor in reducing CO 2 emissions, highlighting the value of investing in education, healthcare, and living standards to achieve sustainable development. These insights underscore the necessity for carefully designed policies that harmonize economic progress, social equity, and environmental sustainability.

Suggested Citation

  • Parveen Kumar & Rajbeer Kaur & Magdalena Radulescu & Branimir Kalaš & Alina Hagiu, 2025. "Drivers of Environmental Sustainability, Economic Growth, and Inequality: A Study of Economic Complexity, FDI, and Human Development Role in BRICS+ Nations," Sustainability, MDPI, vol. 17(9), pages 1-28, May.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:9:p:4180-:d:1649764
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