A step towards environmental mitigation: How do economic complexity and natural resources matter? Focusing on different institutional quality level countries

Changes in the economic structure and human lifestyle lead to environmental pollution, one of today's prime challenges. With this in mind, the main objectives of this study are to evaluate the impacts of economic complexity, natural resources, renewable energy consumption, and foreign direct investment on the ecological footprint in weak, medium, and high levels of institutional quality countries from 1995 to 2017, according to with data availability. This study is probably one of the first studies to examine the effect of the economic complexity on ecological footprint and classify countries based on their institutional quality levels. Furthermore, the interaction of economic complexity and natural resource rents is considered as a new variable. For this purpose, the panel vector autoregressive model is used. The results revealed that economic complexity in all countries has a positive impact on ecological footprint, and also it has the greatest impact on ecological footprint among the considered variables. Conversely, the interaction of economic complexity and natural resources contributes to environmental quality. Notably, the impacts of study variables on ecological footprint vary in countries with different levels of institutional quality. According to the study's outcomes, the main recommendation is the R&D activities improvement to develop eco-friendly technologies and clean energy infrastructure, and transition to a clean industry pattern, which helps to improve environmental quality. Meanwhile, more strategic policies are recommended to policymakers based on the institutional quality levels of countries.

Automated summary

This study evaluates the impacts of economic complexity, natural resources, renewable energy consumption, and foreign direct investment on ecological footprint in countries with different levels of institutional quality. The findings show that economic complexity has a positive impact on ecological footprint and has the greatest influence among the considered variables. Additionally, the interaction of economic complexity and natural resources contributes to environmental quality.