Assessing the Impact of AI Innovation, Financial Development, and the Digital Economy on Load Capacity Factor in the BRICS Region

Authors

  • Sarder Abdulla Al Shiam Department of Management -Business Analytics, St Francis College,USA
  • Shake Ibna Abir Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA
  • Dipankar Saha Department of Economics, Mizoram University, Tanhril, Aizawl, Mizoram, India, 796004
  • Shaharina Shoha Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA
  • Hemel Hossain Masters in Bank Management, Dhaka University, Bangladesh
  • Md Shah Ali Dolon Department of Finance and Financial Analytics, University of New Haven, West Haven, United States
  • Hasibur Rahman School of Business & Technology, Washington University of Virginia, 4300 Evergreen Ln, Annandale, VA 22003.
  • Md Tanvir Ahsan School of Business, Ahsanullah University of Science and Technology, Dhaka, Bangladesh
  • Afsana Akhter Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali-3814, Bangladesh
  • Mohammad Ridwan Department of Economics, Noakhali Science and Technology University

DOI:

https://doi.org/10.56556/jescae.v3i2.981

Keywords:

AI Innovation, Financial Development, Digital Economy, LCC Hypothesis, BRICS

Abstract

This study explores the impact of AI innovation, financial development, and the digital economy on the Load Capacity Factor (LCF) in BRICS nations from 2000 to 2019. Cross-sectional dependence and slope homogeneity tests reveal that the variables exhibit both dependence and heterogeneity. Panel unit root tests confirm stationarity, and a cointegration analysis establishes long-term relationships among the variables. The Panel ARDL method identifies a U-shaped relationship between income and LCF, supporting the LCC hypothesis. AI innovation and the digital economy positively influence LCF, promoting environmental sustainability. Conversely, financial development significantly reduces the LCF in both the short and long terms. To validate these findings, robustness checks using DKSE (Driscoll Kraay Standard Error), AMG (Augmented Mean Group), and CCEMG (Common Correlated Effects Mean Group) estimation techniques yield consistent results with the Panel ARDL analysis. Furthermore, the D-H causality test reveals unidirectional causal relationships from income, financial development, and the digital economy to LCF. It also identifies a bidirectional causal relationship between LCF and AI innovation. These findings highlight the dual role of AI and the digital economy in enhancing environmental sustainability while addressing the challenges posed by financial development in the BRICS nations.

Author Biographies

Sarder Abdulla Al Shiam, Department of Management -Business Analytics, St Francis College,USA

Sarder Abdulla Al Shiam is currently pursuing a Master's degree in the Department of Management with a focus on Business Analytics at St. Francis College, USA. His academic interests lie in harnessing data-driven strategies to solve complex business problems. Sarder is dedicated to mastering the skills required for effective decision-making and analysis in the modern business landscape. His affiliation with St. Francis College underscores his commitment to academic and professional excellence, as he aims to contribute valuable insights to the field of business analytics.

Shake Ibna Abir, Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA

Shake Ibna Abir is currently pursuing a Master's degree in the Department of Mathematics at Western Kentucky University, located in Bowling Green, Kentucky, USA. His academic journey is focused on deepening his expertise in mathematical sciences, contributing to both theoretical and applied research. Shake's commitment to his studies reflects a strong dedication to advancing his knowledge in mathematics, with the aim of making meaningful contributions to the field. His affiliation with Western Kentucky University highlights his pursuit of academic excellence and his aspiration to impact the broader mathematical community.

Shaharina Shoha, Department of Mathematics, Western Kentucky University, Bowling Green, KY, USA

Shaharina Shoha is currently pursuing a Master's degree in the Department of Mathematics at Western Kentucky University, located in Bowling Green, Kentucky, USA. Her academic journey is focused on deepening her expertise in mathematical sciences, contributing to both theoretical and applied research. Her commitment to her studies reflects a strong dedication to advancing her knowledge in mathematics, with the aim of making meaningful contributions to the field.

Md Shah Ali Dolon, Department of Finance and Financial Analytics, University of New Haven, West Haven, United States

Md Shah Ali Dolon is currently pursuing a Master's degree in the Department of Finance and Financial Analytics at the University of New Haven, located in West Haven, United States. His academic focus lies in the intersection of finance and data analysis, where he is developing the skills necessary to navigate and analyze complex financial markets. Md Shah Ali Dolon is committed to leveraging advanced analytics to drive financial decision-making and strategy. His affiliation with the University of New Haven underscores his dedication to academic excellence and his aspiration to contribute to the field of finance and analytics.

Hasibur Rahman, School of Business & Technology, Washington University of Virginia, 4300 Evergreen Ln, Annandale, VA 22003.

Hasibur Rahman is currently pursuing a Master's degree at the School of Business & Technology, Washington University of Virginia, located in Annandale, Virginia. His academic journey is focused on gaining in-depth knowledge and skills in business and technology, preparing him for the challenges of the modern professional world. Hasibur is dedicated to understanding the dynamic interplay between business strategies and technological advancements, aiming to contribute innovative solutions in these fields. His affiliation with Washington University of Virginia reflects his commitment to academic excellence and his ambition to make a significant impact in the business and technology sectors.

 

Md Tanvir Ahsan, School of Business, Ahsanullah University of Science and Technology, Dhaka, Bangladesh

Md Tanvir Ahsan is currently pursuing a Master's degree at the School of Business at Ahsanullah University of Science and Technology in Dhaka, Bangladesh. His academic focus is on gaining a comprehensive understanding of business principles and practices, with an emphasis on applying theoretical knowledge to real-world challenges. Md Tanvir is committed to advancing his expertise in business management and strategy, aiming to contribute to the corporate sector. His affiliation with Ahsanullah University of Science and Technology underscores his dedication to academic excellence and his ambition to make a meaningful impact in the business world.

 

Afsana Akhter, Department of Economics, Noakhali Science and Technology University, Sonapur, Noakhali-3814, Bangladesh

Afsana Rinky is a graduate from the Department of Economics at Noakhali Science and Technology University. She is currently involved in the fields of data analysis and research, where she applies her strong analytical skills to explore economic trends and patterns. Afsana's academic background and hands-on experience in research make her a valuable contributor to various projects, as she continuously seeks to deepen her understanding of economic phenomena through data-driven approaches. Her work reflects a dedication to advancing knowledge in economics and related disciplines.

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Published

2024-06-28

How to Cite

Abdulla Al Shiam, S., Abir, S. I., Dipankar Saha, Shoha, S., Hemel Hossain, Dolon, M. S. A., … Mohammad Ridwan. (2024). Assessing the Impact of AI Innovation, Financial Development, and the Digital Economy on Load Capacity Factor in the BRICS Region. Journal of Environmental Science and Economics, 3(2), 102–126. https://doi.org/10.56556/jescae.v3i2.981

Issue

Vol. 3 No. 2 (2024)

Section

Research Article

License

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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