Factors Influencing Sustainable Development in Pacific Asia: A Quantile Panel Analysis

This research investigates the influence of economic, energy, and institutional variables on sustainable economic growth for Pacific Asian countries using Adjusted Net Savings (ANS) as a more refined measure of sustainable development. Using an unbalanced panel dataset for the period 1996 to 2021, second-generation panel data analysis is conducted to capture both long-run and distributional relationships, addressing potential concerns about cross-sectional dependence. The results indicate the presence of long-run relationships that are stable for both sustainable development itself and for its defining factors. Foreign direct investments (FDI) are found to have the most significant influence on sustainable development for all quantile values, underlining their central importance to long-run capital accumulation efforts. Renewable energy consumption helps increase sustainability outcomes for countries with lower savings performance values, while renewable energy production is found to have a modest but positive influence for each quantile of the distribution of outcomes. Natural resource wealth is seen to have non-linear effects on outcomes, with countries with lower savings values being adversely affected, while countries with higher savings values are beneficially affected. The presence of institutional factors is an enabler for countries with lower values of sustainable development performance.