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A Tailored ESG Framework for Economic Growth in Saudi Arabia: ARDL Evidence from 1990 to 2022

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  • Nagwa Amin Abdelkawy

    (Economics Department, School of Business Administration, King Faisal University, Al Hofuf 31982, Saudi Arabia)

  • Abdullah Sultan Al Shammre

    (Economics Department, School of Business Administration, King Faisal University, Al Hofuf 31982, Saudi Arabia)

Abstract

This study examines the impact of environmental, social, and governance (ESG) performance on economic growth in Saudi Arabia from 1990 to 2022. It uses a tailored ESG index and applies ordinary least squares (OLS) and autoregressive distributed lag (ARDL) models. The analysis reveals that while individual ESG components do not show significant short-term effects, the composite ESG index has a statistically significant positive effect on long-term GDP growth. These findings highlight the importance of integrated ESG strategies in enhancing economic resilience and diversification in resource-based economies. Moreover, although oil rents and trade openness continue to support short-term growth, they are associated with governance and environmental trade-offs, reflecting transitional challenges on the path to sustainability. Thie study provides new empirical evidence on the macroeconomic relevance of ESG in emerging economies and introduces a context-specific ESG index aligned with national policy goals. The results underscore the need to embed of embedding ESG frameworks into national development plans to ensure long-term economic resilience and structural transformation in line with Vision 2030.

Suggested Citation

  • Nagwa Amin Abdelkawy & Abdullah Sultan Al Shammre, 2025. "A Tailored ESG Framework for Economic Growth in Saudi Arabia: ARDL Evidence from 1990 to 2022," Sustainability, MDPI, vol. 17(12), pages 1-19, June.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:12:p:5273-:d:1673971
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    References listed on IDEAS

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    1. Habib M. Alshuwaikhat & Ishak Mohammed, 2017. "Sustainability Matters in National Development Visions—Evidence from Saudi Arabia’s Vision for 2030," Sustainability, MDPI, vol. 9(3), pages 1-15, March.
    2. Nagwa Amin Abdelkawy, 2024. "Diversification and the Resource Curse: An Econometric Analysis of GCC Countries," Economies, MDPI, vol. 12(11), pages 1-29, October.
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    5. Montassar Kahia & Anis Omri & Bilel Jarraya, 2021. "Green Energy, Economic Growth and Environmental Quality Nexus in Saudi Arabia," Sustainability, MDPI, vol. 13(3), pages 1-13, January.
    6. Stephen Hammer & Lamia Kamal-Chaoui & Alexis Robert & Marissa Plouin, 2011. "Cities and Green Growth: A Conceptual Framework," OECD Regional Development Working Papers 2011/8, OECD Publishing.
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