Drivers of Environmental Sustainability, Economic Growth, and Inequality: A Study of Economic Complexity, FDI, and Human Development Role in BRICS+ Nations

This study investigates the intricate relationships among CO2 emissions, income inequality, the Economic Complexity Index (ECI), foreign direct investment (FDI), the Human Development Index (HDI), and the economic growth across countries. Three distinct models are developed: the first examines their effects on economic growth, the second analyzes their impact on income inequality, and the third explores their influence on CO2 emissions. Advanced econometric methods, including Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS), are employed to ensure robust and reliable results. The findings indicate that income inequality impedes economic growth, whereas economic growth and greater economic complexity help reduce inequality. While FDI significantly boosts GDP growth, it also widens the income disparities and intensifies environmental degradation, raising questions about the sustainability and quality of foreign investments. In contrast, human development emerges as a vital driver of economic growth and a critical factor in reducing CO2 emissions, highlighting the value of investing in education, healthcare, and living standards to achieve sustainable development. These insights underscore the necessity for carefully designed policies that harmonize economic progress, social equity, and environmental sustainability.