Can energy efficiency and natural resources foster economic growth? Evidence from BRICS countries

Abstract

The availability of natural resources has a significant impact on economic growth. Nevertheless, the ineffective utilization of these resources can lead to economic instability and conflict, in addition to poor economic performance. Despite abundant natural resources, several resource-rich countries, such as Brazil, Africa, and India, have not realized the benefits of their natural capital and have not reaped the benefits of their abundant natural resource reserves. This study examines the role of natural resource rent in effecting economic development is evaluated for Brazil, Russia, India, China and South Africa nations between the years 1990 and 2020 in the context of energy efficiency, financial risk, and technological innovation. To estimate the parameters, advanced econometric methods are utilized. According to the findings, natural resources have an effect that is counterproductive to the advancement of the economy. As a direct consequence, the resource curse argument can be validated for the sample nations. In addition, we found that improvements in technological innovation and energy efficiency both contributed positively to the expansion of the economy. On the other hand, the likelihood of financial loss is inversely proportional to economic development.