Environmental Factors, Trade Openness And Investment Determinants Of Economic Growth In Brics Nations: A Panel Data Approach

Abstract

This paper examines the impact of environmental factor, trade openness, and foreign direct investment (FDI) on economic growth in BRICS countries from 1990 to 2024. Using advanced panel econometric techniques, the study accounts for cross-sectional dependence and integration across member nations. Panel unit root tests (Pesaran CADF and CIPS) show that all variables are integrated at order I(1), while cointegration analyses (Kao, Pedroni, and Westerlund) confirm the existence of stable long-run relationships among them. The results highlight strong interconnections, with environmental sustainability, trade openness and foreign direct investment as a positives driver of long-term growth. Findings suggest that excessive reliance on natural resources has adverse effects, underscoring the need for innovation in sustainable resource management. For BRICS policymakers, the study recommends adopting strategies that reduce emissions, expand renewable energy use, and promote green finance. Such measures are essential for balancing rapid economic expansion with environmental protection, ensuring sustainable growth across the region.