The impact of economic complexity and green policies on environmental efficiency
Author(s)
Date Issued
2023
Type
article
Volume
11
Issue
2
Start Page
22
End Page
34
Journal
Abstract
The ecological transition can only be achieved by combining Ecological Technological Progress with Ecological Structural Change in economic systems (Guarini and Oreiro, 2023). In the capitalist context, environmental efficiency is not only a criterion, but it represents a crucial driver of firms’ profitability and sustainability. Shifting labour and resources from the brown sectors to green ones, the Ecological Structural Change is essential to improve the ecological dimension of output production, especially for emerging economies. Being a multidimensional phenomenon, it encompasses a social dimension associated with the green preferences and habits of consumers and institutions. Still, it is mainly a technological one related to capital accumulation. In line with the new developmentalism concept of productive and technological sophistication (Bresser-Pereira, 2019), the ecological structural change could be considered an ecological sophistication of technological, social, and cultural factors. This paper aims to contribute to the eco-developmentalism by analysing the ecological structural change through the critical impact of the economic complexity and environmental policy stringency on environmental efficiency by implementing a Feasible Generalised Least Squares estimator to fit the econometric model on a panel dataset extracted from the OECD database for 35 countries covering the period 1990-2020. Findings suggest stringent environmental policies combined with a sophistication of technology and exports could represent a winning strategy to facilitate Ecological Structural Change, although the ecological transition does not seem to involve structural changes in the production system for three Latin American countries considered: Brazil, Chile and Mexico.