Paving the ways toward sustainable development: the asymmetric effect of economic complexity, renewable electricity, and foreign direct investment on the environmental sustainability in BRICS-T

Previous empirical studies have typically employed carbon dioxide (CO2) emissions and ecological footprint (EF) as indices of environmental quality; however, these measures ignore supply-side environmental concerns. To overcome this issue, this study uncovers the effect of economic complexity, foreign direct investment, and renewable electricity on the load capacity factor (LCF). The panel nonlinear autoregressive distributed lag (NARDL) method is used to analyze BRICS-T countries for the period 1990-2018. The outcomes reveal that a positive shock in economic complexity has a long-run positive impact on the LCF, but is insignificant in the short-run. Similarly, a negative shock in economic complexity has only a short-run environmental-promoting effect. A negative shock in foreign direct investment improves the LCF in both the short-run and long-run, but a positive shock in foreign direct investment promotes environmental quality only in the long-run. Similarly, renewable electricity improves environmental quality in the both short-run and long-run. Both control variables (i.e., economic growth and fossil fuel consumption) have a negative impact on the LCF in the both short-run and long-run. Also, the findings are robust to advanced econometric methodologies. Based on empirical findings, relevant policy points for improving environmental quality and achieving sustainable development goals are proposed.