URBANIZATION, ENVIRONMENTAL DEGRADATION AND ECONOMIC GROWTH NEXUS IN BRICS ECONOMIES

Abstract

This research aims to investigate the nexus between urbanization environmental degradation and economic growth in BRICS (Brazil, Russia, India, China, South Africa) economies. This relation is still under question. Some researcher shows positive affiliation of urbanization with economic growth and environmental degradation while some show negative. But truth is that urbanization environmental degradation and economic growth are correlated to each other. For the analysis, data is taken from the period 1990 to 2018. Two models are created the first model shows the urbanization nexus with economic growth and the second is showing the nexus of environmental degradation and economic growth. The GDP is the dependent variable in both model and independent variable are labor force participation rate, carbon dioxide emission, gross fixed capital formation, trade openness, exchange rate, school enrollment, real interest rate, urbanization growth, and poverty headcount. Annual data is collected from the world indicator file. To check the correlation between variables, panel co-integration analyses such as Pedroni co-integration test, and Kao residual co-integration tests are applied. Panel co-integration tests are employed on two models separately. Both FMOLS models estimated the relevance. A causality test is also applied. The concluding effect shows that in BRICS urbanization has a positive effect on economic growth and a negative effect of environmental degradation on economic growth. The current study base on the least considered variables panel cointegration test FMOLS technique is used.