The Role of Financial Sector Development and Educational Attainment in the Achievement of Economic Sustainability: Evidence from BRICS Economies

The worldwide serious deteriorations in environmental and social quality have led many countries to follow institutional, social, and economic policies eliminating the negative environmental and social costs of economic growth and development, urbanization, and population growth. This study investigates the influence of financial sector development and educational attainment on economic sustainability in a sample of BRICS economies over the 1995-2020 term through causality and cointegration tests. The results of the causality test find a bidirectional causal interplay between financial development and economic sustainability and a unilateral causal effect from educational attainment on economic sustainability. Furthermore, cointegration analysis unveils a long-term positive influence of financial development and educational attainment on economic sustainability, but the effect of educational attainment on economic sustainability is ascertained to be slightly higher when compared with that of financial sector development. As a result, both educational attainment and financial development with environmental and social measures can be useful instruments to achieve economic sustainability.