Impact of technology and economic complexity on environmental pollution and economic growth in developing and developed countries: using IPAT and STIRPAT models

These days, the most serious threats to the global economy, society, and humans are climate change and global warming, mainly rooted in the sharp increase of economic activities and their concomitant greenhouse gas emissions. This paper aims to investigate how economic complexity and various sectors of the economy affect environmental and economic development. This study employs a modified IPAT and STIRPAT model to investigate the relationship of environmental pollution and economic development with economic complexity, economic structure, and technology in 21 MENA and 34 OECD countries between 1971-2017. Our findings show that economic complexity and industrialization positively affect economic growth in both groups of countries. However, economic complexity and industrialization affect environmental pollution in MENA and developing countries positively but in OECD and developed countries negatively. This relationship accepts the Environmental Kuznets Hypothesis for the nexus of economic complexity and environmental pollution. According to the findings, policymakers in developing countries should increase environmental considerations in their development planning. Also, developed countries should assist developing countries in their endeavors to decrease environmental contamination by supplying technology transfer and financial aid.