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Investigating the nexus between CO2 emissions, renewable energy consumption, FDI, exports and economic growth: evidence from BRICS countries

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Abstract

This paper investigates the effects of carbon emissions, renewable energy consumption, FDI, and exports on economic growth in BRICS countries from 2000 to 2018. The study uses other variables such as interest rates, labor force, trade openness, and gross domestic savings to determine the long-run relationship among variables. We employ several econometric techniques, such as ARDL, pool mean group (PMG), mean group (MG), and the Dumitrescu Hurlin panel causality tests, to draw empirical inferences. The estimation of the PMG model indicates that carbon emissions, renewable energy consumption, exports, FDI, and savings have a significant positive long-run impact on economic growth, while interest rates and trade openness affect economic growth negatively. FMOLS and DOLS results also confirm the robustness of PMG long-run results. Moreover, the Dumitrescu Hurlin panel causality results indicate a bi-directional causal relationship between carbon emissions and economic growth and between economic growth and foreign direct investment, also one-way causality from exports and labor force to economic growth. It implies that an increase in carbon emissions and FDI leads to an increase in economic growth, also increase in economic growth, the CO2 emissions and FDI increase in BRICS economies. Finally, the current study recommends a vital policy that the primary focus should target toward promoting renewable energy consumption, FDI, exports, and savings to boost economic growth in BRICS countries.

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Funding

This research is financially supported by below mentioned two research Projects.

i. The Science and Technology Program (Soft Science) in Guangdong Province Key Project (2020B1010010014) Study on Direction of New Energy Technology Innovation and New Energy Industry Development.

ii. National Social Science Foundation of China (18BJL065).

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Authors and Affiliations

  1. School of Management, Guangzhou University, Guangzhou, 510006, People’s Republic of China

    Amir Iqbal & Xuan Tang

  2. Faculty of Informatics and Management, University of Hradec Králové, Hradec Králové, 50003, Czech Republic

    Samma Faiz Rasool

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  1. Amir Iqbal
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AI develops the research idea and drafts the research paper. TX supervise this research project. SFR works on the literature review and proofreading the study.

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Correspondence to Xuan Tang.

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Iqbal, A., Tang, X. & Rasool, S.F. Investigating the nexus between CO2 emissions, renewable energy consumption, FDI, exports and economic growth: evidence from BRICS countries. Environ Dev Sustain 25, 2234–2263 (2023). https://doi.org/10.1007/s10668-022-02128-6

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