The Impact of Economic Complexity on the Formation of Environmental Culture

Abstract

This paper establishes economic complexity as a powerful predictor of environmental attitudes. While the economic complexity index (ECI) has been associated with a series of economic outcomes, yet there has not been a link in the literature between ECI and environmental attitudes. This research pushes forward the hypothesis that economic complexity shapes cultural values and beliefs. The research method used is a multilevel empirical analysis that associates aggregate values of the ECI, at the country level, with individual responses related to attitudes towards the environment. Our findings suggest that a marginal increase of the ECI, increases by 0.191 the probability to be a member of environmental organisations and an increase by 0.259 in the probability to engage in voluntary work for the environment. To further reinforce our findings by ensuring identification we replicate the benchmark analysis using as a proxy of a country’s level of economic complexity, the average ECI of the neighbouring countries (weighted by population and/or volume of trade). With a similar intention, i.e., to mitigate endogeneity concerns as well as to further frame our findings as "the cultural implications of ECI" we replicate our analysis with a sample of second generation immigrants. The immigrant analysis, suggests that the level of economic complexity of the parents’ country of origin, has a long-lasting effect on second generation immigrants’ attitudes related to the environment. Because humankind’s attitudes and actions are of key importance for a sustainable future, a better understanding as to what drives environmental attitudes appears critical both for researchers and policy makers.