One major concern about foreign direct investment (FDI) is the potential negative environmental impact due to increased CO₂ emissions. However, there is a possibility that FDI mitigates CO₂ emissions through green innovation and creates a cleaner environment. In the existing literature, there is no significant empirical evidence on the linkage among FDI, green innovation and CO₂ emissions in the context of BRICS countries. Hence, this study aims to analyze the impact of FDI and green innovation on the environmental quality of BRICS economies for 1990–2014. The study employed Augmented Mean Group (AMG) estimators for empirical data analysis. The study’s findings depict that foreign direct investment, energy use, and economic growth have a significant and positive impact on the CO₂ emissions of BRICS economies. Moreover, green innovation has a significant inverse impact on CO₂ emissions. The results show bidirectional causalities between CO₂ emissions and green innovation, trade openness and CO₂ emissions, energy use and CO₂ emissions, and urbanization and CO₂ emissions. Additionally, the findings reveal a one-way causality from CO₂ emissions to GDP and CO₂ emissions to urbanization. This study offers essential policy recommendations for the environmental sustainability of BRICS countries through green innovation.

The idea behind the spillover effect of FDI on economic growth is based on the idea that multinational companies can bring technological innovation and rich knowledge to host countries. Therefore, FDI plays a vital role in technological innovations. This study aims to investigate the impact of foreign direct investment (FDI) on the technological innovation of BRICS countries from 2000 to 2020. This study uses the latest econometric techniques, such as the cross-sectional dependence (CD) test, second-generation unit root tests, panel cointegration tests and the Dumitrescu-Hurlin causality test. For long-run run estimation, this study uses the augmented mean group (AMG) panel estimator and the common correlated effects mean group (CCEMG) estimator for empirical analysis. The findings of the study show that foreign direct investment (FDI), trade openness, economic growth, and research & development expenditure positively impact technological innovation in BRICS countries. Also, the model’s long-term causality and lagged error correction term (ECT) are significantly negative. Suggested policy measures will be helpful for BRICS economies in boosting technology innovation through FDI.

In the current era, economic growth is inevitable for global prosperity but achieving sustainable economic development is one of the significant challenges for the developing world. The present study explores the impacts of foreign direct investment, energy use, and technological innovations on the economic growth and environmental quality of BRICS countries for the period 1990–2018. We used the augmented mean group (AMG), the common correlated effects mean group estimator (CCEMG), and several other modern-day empirical techniques to analyze data. The findings show that foreign direct investment increases economic growth but harms the environmental sustainability of BRICS countries. Moreover, we have seen that energy use is directly proportional to economic growth and CO₂ emissions. This confirms that energy use is one of the factors which harms the environmental quality in BRICS economies. Likewise, economic growth increases CO₂ emissions. On the other hand, technology innovation has a direct relationship with economic growth but an inverse relationship with CO₂ emissions as it improves the environmental sustainability of the BRICS region. This research adds to the existing literature by exploring the interplay between FDI, innovation, energy use, economic growth, and environmental outcomes in the context of major emerging economies. The study’s findings provide empirical evidence on the role of these factors in shaping the environmental outcomes in the BRICS economies, and they have implications for policymakers and stakeholders in addressing environmental challenges such as global warming and climate change.