Do economic complexity and trade diversification promote green growth in the BRICTS region? Evidence from advanced panel estimations

Abstract

Green growth is a comprehensive and integrated approach that ensures the potential economic deliverables of the natural capital on a sustainable basis. Existing studies have explored various deriving factors of green growth. However, none of the studies has evaluated the combined effect of economic complexity, trade diversification, renewable energy consumption, and environment-related taxes to promote green growth. Therefore, this study quantified the impact of these variables on achieving green growth goals for BRICTS countries (Brazil, Russian Federation, India, China, Turkey, and South Africa) from 1995 to 2018. The study addressed the potential econometric issues of panel data, such as cross-section dependency, slope heterogeneity, data nonstationary through robust testing. Cross-Sectional ARDL has been applied to investigate the long-run and short-run association among the study variables. The findings suggest that economic complexity, trade diversification, renewable energy consumption, and environment-related taxes significantly drive green growth in BRICTS countries. However, their marginal contribution substantially varied. Similar results are endorsed using alternative estimators and offer pertinent policy implications.