Sustainable development efficiency and its influencing factors across BRICS and G7 countries: An empirical comparison

Abstract

Sustainable development is the global overarching paradigm and essential for achieving economic, social, and environmental development. The primary goal of this study is to compare the efficiency of sustainable development and evaluate its influencing factors across the BRICS (Brazil, Russia, India, China, and South Africa) and G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, and United States) countries by examining total factor productivity, efficiency change, and technological change. For this, we adopted the super-efficiency SBM-DEA model with undesirable output and Global Malmquist-Luenberger (GML) productivity index model to overcome inaccurate efficiency results while avoiding environmentally unwanted outputs and to resolve the shortcomings of the conventional Malmquist-Luenberger index. It is also necessary to explore relevant influencing factors on the environmental pollution thereby affects the sustainable development efficiency of the study countries, thus, this study employed STIRPAT approach. A panel data of BRICS and G7 countries from 2005 to 2015 is used. The findings reveal that sustainable total factor productivity (GML) in China (1.0165), the US (1.0150), and UK (1.0024) is on the rise. China is also one of the countries that experienced the highest positive efficiency change (GMLEC) (1.0147) and the US has the highest positive technical change (GMLTC) (1.0103). Contrarily, Russia experienced the highest decline in GMLTC (0.9316) as well as GML indexes (0.9337), whereas South Africa experienced the highest decline in GMLEC (0.9707). Additionally, GDP per capita (.0969) and population (.4178) have a positive influence on CO2 emissions in the BRICS countries, whereas in the G7 nations, GDP per capita (−.2180) and population (−.1249) have negative influences on CO2 emissions. The study also offers practical recommendations to address identified limitations and improve sustainable productivity and environmental efficiency. The inverse link between GDP and CO2 emissions might imply that the G7 nations have passed the turning point on an environmental Kuznets curve (EKC), but this finding does not support the EKC hypothesis in the BRICS nations.