Economic complexity and environmental performance: A global systematic review emphasizing institutional quality
Document Type : Review Paper
Authors
- 1 Department of Economics, Faculty of Economics and Social Science, Shahid Chamran University of Ahvaz, Ahvaz, Iran
- 2 Department of Science, Technology and Innovation Financing and Economics, National Research Institute for Science Policy (NRISP), Tehran, Iran
Abstract
This systematic review examines the relationship between economic complexity (ECI), institutional quality (IQ), and environmental performance (EP). This review bridges the critical gap in understanding how IQ mediates ECI's environmental impacts. For this purpose, we analyze 76 studies of environmental economics from 2017 to 2024, including ECI, which is increasingly used in the literature. The research is organized to respond to three main questions of research evolution, the literature focus, and implications. The results show that ECI significantly influences ecological footprints and carbon emissions, with effects varying by country development and institutional strength. ECI can reduce the EF in countries with robust institutions and higher levels of development. Our review reveals the Environmental Kuznets Curve (EKC) as the dominant framework in the literature. Key policy implications include strengthening institutions, promoting renewable energy, and tailoring strategies to country-specific contexts. Regarding the Sustainable Development Goals, this study highlights the essential role of the interplay of economic complexity, institutions, and environmental outcomes.
Keywords
Subjects
environment
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