Unpacking the Impact of Financialization and Globalization on Environmental Degradation in BRICS Economies

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Environmental degradation is a pressing global concern, necessitating a comprehensive understanding of its determinants. This research uses the pollution haven hypothesis to explore the impact of financialization and globalization on environmental degradation in BRICS economies. The study offers evidence-based perspectives on the interplay between financialization, globalization, and the ecological footprint by utilizing yearly data from 1985 to 2020 and adopting the pooled least square and fixed effect estimation methods. Results indicate that Foreign Direct Investment (FDI) may exacerbate environmental deterioration by influencing the three facets of globalization: economic, social, and political. Moreover, the study emphasizes that the financial market could aid in lessening the ecological footprint in BRICS economies. Furthermore, a heightened utilization of renewable energy sources can aid in mitigating environmental deterioration. However, elevated levels of human capital could potentially lead to augmented economic activities and resource usage, thereby increasing the ecological footprint. These results add to the knowledge of environmental degradation and deliver critical insights for policy formulators in BRICS countries. The study underlines the necessity for effective environmental rules and strategies to counterbalance the detrimental effects of financialization and globalization on the environment. It also points out the significance of sustainable practices and global collaboration in tackling environmental challenges. \textcopyright 2023 Elsevier Ltd