Energy Transition in BRICS Countries: The Role of Human Capital, Structural Transformation, and Institutional Quality: A Panel ARDL Approach

Mabrouki, Mohamed (2025): Energy Transition in BRICS Countries: The Role of Human Capital, Structural Transformation, and Institutional Quality: A Panel ARDL Approach.

Abstract

The BRICS economies (Brazil, Russia, India, China, and South Africa) represent a critical frontier in the global energy transition, balancing rapid economic development with pressing environmental imperatives. This study investigates the determinants of renewable energy adoption in BRICS countries from 2000 to 2022, employing a novel Panel ARDL methodology that addresses critical methodological gaps in existing literature. Using the Pooled Mean Group estimator and robust validation through Mean Group, Common Correlated Effects Mean Group, and Fixed Effects approaches, we analyze the synergistic effects of economic, structural, human capital, and institutional factors. Our findings reveal that gross fixed capital formation emerges as the most significant determinant, exhibiting a robust negative relationship with renewable energy share (coefficient: -0.172, p<0.01), indicating a pervasive technological lock-in effect from carbon-intensive investments. The error correction mechanism confirms a stable long-run equilibrium with moderate adjustment speed (18.3% annually), reflecting structural inertia characteristic of energy system transformations. Surprisingly, human capital and institutional quality demonstrate statistically insignificant impacts in aggregated analysis, though significant heterogeneity emerges at country level. The study contributes to the literature through its comprehensive methodological framework, innovative use of UNCTAD PCI indices, and nuanced policy insights. Our results underscore that investment reorientation—rather than investment volume—constitutes the primary lever for accelerating energy transitions in emerging economies, necessitating tailored approaches that account for BRICS members' distinct socioeconomic contexts and institutional frameworks.

• Item Type: MPRA Paper
• Language: English
• Keywords: Energy Transition • BRICS Economies • Panel ARDL • Technological Lock-in • Human Capital • Institutional Quality • Structural Transformation • Renewable Energy
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries

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