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Relationship between energy, investment, human capital, environment, and economic growth in four BRICS countries

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Abstract

This study empirically evaluates the impact of energy, environmental pollution, human capital, financial development, and physical capital on economic growth in countries like Brazil, India, China, and South Africa (BRICS-4) from 1981 to 2015. Relevant diagnostic tests, the Panel Fully Modified Ordinary Least Squares (F.M.O.L.S.), Robust Least Squares (R.L.S.) methods, and the Dumitrescu-Hurlin Panel causality test are implemented for empirical investigation. The key outcomes from the F.M.O.L.S. and R.L.S. methods indicate that energy consumption, physical capital, human capital, and financial development contribute to economic growth, while environmental pollution attenuates economic growth. Moreover, the Dumitrescu-Hurlin Panel causality test results reveal about the bidirectional and unidirectional causality between energy consumption, environmental pollution, investment, human capital, and financial sector expansion and growth. Thus, based on the findings, this study recommend that the BRICS countries’ policy makers need to formulate public policy to ensure adequate energy supply, enhance foreign investments, improve health sector, develop financial sector, and regulate environmental pollution to achieve sustainable development.

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  1. Department of Economics, Faculty of Business and Economics, Abdul Wali Khan University Mardan, Mardan, KP, Pakistan

    Muhammad Azam

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  1. Muhammad Azam
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Correspondence to Muhammad Azam.

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Highlights

• Investigates linkages between energy, environment, financial development, investment, human capital, and growth for BRICS-4.

• The Panel FMOLS and Robust Least Squares methods are used

• Results indicate that energy, financial development, and physical and human capital contribute to economic growth.

• Results also reveal that environmental pollution discourages economic growth.

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Azam, M. Relationship between energy, investment, human capital, environment, and economic growth in four BRICS countries. Environ Sci Pollut Res 26, 34388–34400 (2019). https://doi.org/10.1007/s11356-019-06533-9

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  • DOI: https://doi.org/10.1007/s11356-019-06533-9

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