Abstract
•Investigate the effect of economic complexity on energy-related environmental risks (ERER) in the USA.•Extend the traditional quantile-on-quantile regression model to the multivariate case.•Find time-varying effects of economic complexity, economic growth, FDI, trade, and urbanization on ERER.•Effect of economic complexity is negative and weak in the extremely lower quantiles of ERER.•Effect of FDI (except the middle quantile) and urbanization is negative across the quantiles of ERER.
This study uses the economic complexity index to examine how knowledge accumulation and its uses affect energy-related environmental risks in the USA over the period 1995:Q1–2020:Q4. To this end, we extend the traditional bivariate Quantile-on-Quantile Regression to the multivariate case. The empirical results provide time-varying effects of economic complexity, economic growth, FDI, trade openness, and urbanization on energy-related environmental risks. Particularly, the effect of economic complexity is negative and weak in the extremely lower quantiles of energy-related environmental risks, while it is positive and stronger in the middle and higher quantiles. The implication of these results is that economic complexity only condenses energy-related environmental risks when such environmental risks caused by energy-related factors are extremely low. Furthermore, economic growth and tradeopenness stimulate energy-related environmental risks but the effects of FDI and urbanization reduce energy-related environmental risks. Therefore, these findings provide insights into achieving environmental sustainability targets in the USA.