IDEAS home Printed from https://ideas.repec.org/a/wly/sustdv/v33y2025i2p2060-2077.html
   My bibliography  Save this article

ESG and economic growth: Catalysts for achieving sustainable development goals in developing economies

Author

Listed:
  • Mithilesh Gidage
  • Shilpa Bhide

Abstract

This study investigates the impact of Environmental, Social, and Corporate Governance (ESG) dimensions and economic growth on the achievement of Sustainable Development Goals (SDGs) in developing countries. The research utilizes a quantitative approach, analyzing panel data from 12 developing nations from 2010 to 2022. The Panel ARDL (Pooled Mean Group) method is applied to assess both short‐term and long‐term effects of disaggregated ESG components—environmental, social, and governance scores—on SDG attainment. Robustness is confirmed through endogeneity tests conducted using Instrumental Variable (IV) regression analysis with the Two‐Stage Least Squares (2SLS) method. The results reveal a positive relationship between ESG dimensions and SDG attainment, with economic growth also contributing significantly to SDG progress. The study highlights the importance of integrating ESG principles with economic growth strategies to enhance SDG fulfillment in developing countries, offering valuable insights for policymakers and business leaders in advancing sustainable development agendas.

Suggested Citation

  • Mithilesh Gidage & Shilpa Bhide, 2025. "ESG and economic growth: Catalysts for achieving sustainable development goals in developing economies," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(2), pages 2060-2077, April.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:2:p:2060-2077
    DOI: 10.1002/sd.3199
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sd.3199
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sd.3199?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Luis Fonseca & Filipe Carvalho, 2019. "The Reporting of SDGs by Quality, Environmental, and Occupational Health and Safety-Certified Organizations," Sustainability, MDPI, vol. 11(20), pages 1-20, October.
    2. Joyeeta Gupta & Courtney Vegelin, 2016. "Sustainable development goals and inclusive development," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 16(3), pages 433-448, June.
    3. Eliza Farelnik & Agnieszka Stanowicka & Wioletta Wierzbicka, 2021. "The effects of membership in the Polish National Cittaslow Network," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 16(1), pages 139-167, March.
    4. Farhad Taghizadeh-Hesary & Naoyuki Yoshino, 2020. "Sustainable Solutions for Green Financing and Investment in Renewable Energy Projects," Energies, MDPI, vol. 13(4), pages 1-18, February.
    5. Mosab I. Tabash & Umar Farooq & Ali Matar & Mujeeb Saif Mohsen Al-Absy, 2024. "Role of governance in attracting foreign direct investment inflow: empirical evidence from South Asia region," Cogent Economics & Finance, Taylor & Francis Journals, vol. 12(1), pages 2358930-235, December.
    6. Rui Coelho & Shital Jayantilal & Joao J. Ferreira, 2023. "The impact of social responsibility on corporate financial performance: A systematic literature review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1535-1560, July.
    7. Francesco Rosati & Lourenço Galvão Diniz Faria, 2019. "Business contribution to the Sustainable Development Agenda: Organizational factors related to early adoption of SDG reporting," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(3), pages 588-597, May.
    8. Carmelo Reverte, 2022. "The importance of institutional differences among countries in SDGs achievement: A cross‐country empirical study," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(6), pages 1882-1899, December.
    9. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LLC, vol. 7(3), pages 281-312, September.
    10. Robert G. Eccles & Ioannis Ioannou & George Serafeim, 2014. "The Impact of Corporate Sustainability on Organizational Processes and Performance," Management Science, INFORMS, vol. 60(11), pages 2835-2857, November.
    11. Xin Jin & Xue Lei, 2023. "A Study on the Mechanism of ESG’s Impact on Corporate Value under the Concept of Sustainable Development," Sustainability, MDPI, vol. 15(11), pages 1-22, May.
    12. Lan Xue & Lingfei Weng & Hanzhi Yu, 2018. "Addressing policy challenges in implementing Sustainable Development Goals through an adaptive governance approach: A view from transitional China," Sustainable Development, John Wiley & Sons, Ltd., vol. 26(2), pages 150-158, March.
    13. Muhammad Azeem Qureshi & Minhas Akbar & Ahsan Akbar & Petra Poulova, 2021. "Do ESG Endeavors Assist Firms in Achieving Superior Financial Performance? A Case of 100 Best Corporate Citizens," SAGE Open, , vol. 11(2), pages 21582440211, June.
    14. Muhammad Sadiq & Thanh Quang Ngo & Adamu Abdurrahman Pantamee & Khurshid Khudoykulov & Truong Thi Ngan & Luc Phan Tan, 2023. "The role of environmental social and governance in achieving sustainable development goals: evidence from ASEAN countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(1), pages 170-190, January.
    15. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    16. Hayder Abbas Drebee & Nor Azam Abdul Razak & Razzaq Thiab Shaybth, 2020. "The Impact of Governance Indicators on Corruption in Arab Countries," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 14(3), September.
    17. Ting-Ting Li & Kai Wang & Toshiyuki Sueyoshi & Derek D. Wang, 2021. "ESG: Research Progress and Future Prospects," Sustainability, MDPI, vol. 13(21), pages 1-28, October.
    18. Pratima Bansal, 2005. "Evolving sustainably: a longitudinal study of corporate sustainable development," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 197-218, March.
    19. Hafezali Iqbal Hussain & Katarzyna Szczepanska-Woszczyna & Fakarudin Kamarudin & Nazratul Aina Mohamad Anwar & Mohd Haizam Mohd Saudi, 2021. "Unboxing the black box on the dimensions of social globalisation and the efficiency of microfinance institutions in Asia," Oeconomia Copernicana, Institute of Economic Research, vol. 12(3), pages 557-592, September.
    20. Addisu A. Lashitew, 2021. "Corporate uptake of the Sustainable Development Goals: Mere greenwashing or an advent of institutional change?," Journal of International Business Policy, Palgrave Macmillan, vol. 4(1), pages 184-200, March.
    21. Lintang D. Sekarlangit & Ratna Wardhani, 2021. "The Effect of the Characteristics and Activities of the Board of Directors on Sustainable Development Goal (SDG) Disclosures: Empirical Evidence from Southeast Asia," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    22. James X. Zhan & Amelia U. Santos-Paulino, 2021. "Investing in the Sustainable Development Goals: Mobilization, channeling, and impact," Journal of International Business Policy, Palgrave Macmillan, vol. 4(1), pages 166-183, March.
    23. Leonardo S. Alaimo & Filomena Maggino, 2020. "Sustainable Development Goals Indicators at Territorial Level: Conceptual and Methodological Issues—The Italian Perspective," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(2), pages 383-419, January.
    24. Jan Anton van Zanten & Rob van Tulder, 2021. "Improving companies' impacts on sustainable development: A nexus approach to the SDGS," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3703-3720, December.
    25. Jiang, Ping-Chuan & Feng, Gen-Fu & Yang, Hao-Chang, 2022. "New measurement of sovereign ESG index," Innovation and Green Development, Elsevier, vol. 1(2).
    26. Hoang Bui & Zoltán Krajcsák, 2023. "The impacts of corporate governance on firms’ performance: from theories and approaches to empirical findings," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 32(1), pages 18-46, July.
    27. Jennifer Martínez‐Ferrero & Emma García‐Meca, 2020. "Internal corporate governance strength as a mechanism for achieving sustainable development goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(5), pages 1189-1198, September.
    28. Asan Vernyuy Wirba, 2024. "Corporate Social Responsibility (CSR): The Role of Government in promoting CSR," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7428-7454, June.
    29. Sinha, Avik & Sengupta, Tuhin & Alvarado, Rafael, 2020. "Interplay between Technological Innovation and Environmental Quality: Formulating the SDG Policies for Next 11 Economies," MPRA Paper 104247, University Library of Munich, Germany, revised 2020.
    30. Bertrand Kian Hassani & Yacoub Bahini, 2022. "Relationships between ESG Disclosure and Economic Growth: A Critical Review," JRFM, MDPI, vol. 15(11), pages 1-23, November.
    31. Lu, Jun & Li, Wengui & Huang, Wei, 2024. "Corporate social responsibility and stock resilience to COVID-19: A contract theory perspective," International Review of Economics & Finance, Elsevier, vol. 89(PB), pages 12-29.
    32. Demena, Binyam Afewerk & Afesorgbor, Sylvanus Kwaku, 2020. "The effect of FDI on environmental emissions: Evidence from a meta-analysis," Energy Policy, Elsevier, vol. 138(C).
    33. Halkos, George & Argyropoulou, Georgia, 2022. "Using environmental indicators in performance evaluation of sustainable development health goals," Ecological Economics, Elsevier, vol. 192(C).
    34. Newig, Jens & Jager, Nicolas W. & Challies, Edward & Kochskämper, Elisa, 2023. "Does stakeholder participation improve environmental governance? Evidence from a meta-analysis of 305 case studies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 82.
    35. Mithilesh Gidage & Shilpa Bhide & Rajesh Pahurkar & Ashutosh Kolte, 2024. "ESG Performance and Systemic Risk Nexus: Role of Firm-Specific Factors in Indian Companies," JRFM, MDPI, vol. 17(9), pages 1-28, August.
    36. Seher Gülşah Topuz, 2022. "The Relationship Between Income Inequality and Economic Growth: Are Transmission Channels Effective?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(3), pages 1177-1231, August.
    37. Ivan Montiel & Alvaro Cuervo-Cazurra & Junghoon Park & Raquel Antolín-López & Bryan W. Husted, 2021. "Implementing the United Nations’ Sustainable Development Goals in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(5), pages 999-1030, July.
    38. Maksym Ivanyna & Andrea Salerno, 2021. "Governance for Inclusive Growth," IMF Working Papers 2021/098, International Monetary Fund.
    39. Favourate Y. Mpofu, 2022. "Green Taxes in Africa: Opportunities and Challenges for Environmental Protection, Sustainability, and the Attainment of Sustainable Development Goals," Sustainability, MDPI, vol. 14(16), pages 1-26, August.
    40. Shahbaz, Muhammad & Sharma, Rajesh & Sinha, Avik & Jiao, Zhilun, 2021. "Analyzing nonlinear impact of economic growth drivers on CO2 emissions: Designing an SDG framework for India," Energy Policy, Elsevier, vol. 148(PB).
    41. Niloufar Fallah Shayan & Nasrin Mohabbati-Kalejahi & Sepideh Alavi & Mohammad Ali Zahed, 2022. "Sustainable Development Goals (SDGs) as a Framework for Corporate Social Responsibility (CSR)," Sustainability, MDPI, vol. 14(3), pages 1-27, January.
    42. Zafar, Muhammad Wasif & Zaidi, Syed Anees Haider & Khan, Naveed R. & Mirza, Faisal Mehmood & Hou, Fujun & Kirmani, Syed Ali Ashiq, 2019. "The impact of natural resources, human capital, and foreign direct investment on the ecological footprint: The case of the United States," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    43. Wettstein, Florian & Giuliani, Elisa & Santangelo, Grazia D. & Stahl, Günter K., 2019. "International business and human rights: A research agenda," Journal of World Business, Elsevier, vol. 54(1), pages 54-65.
    44. Harman Preet Singh & Ajay Singh & Fakhre Alam & Vikas Agrawal, 2022. "Impact of Sustainable Development Goals on Economic Growth in Saudi Arabia: Role of Education and Training," Sustainability, MDPI, vol. 14(21), pages 1-25, October.
    45. Antonio Costa & Alessandra Tafuro & Marco Benvenuto & Carmine Viola, 2021. "Corporate Social Responsibility through SDGs: Preliminary Results from a Pilot Study in Italian Universities," Administrative Sciences, MDPI, vol. 11(4), pages 1-13, October.
    46. Gudrun Erla Jonsdottir & Throstur Olaf Sigurjonsson & Ahmad Rahnema Alavi & Jordan Mitchell, 2021. "Applying Responsible Ownership to Advance SDGs and the ESG Framework, Resulting in the Issuance of Green Bonds," Sustainability, MDPI, vol. 13(13), pages 1-20, June.
    47. Fengsheng Chien, 2023. "The role of corporate governance and environmental and social responsibilities on the achievement of sustainable development goals in Malaysian logistic companies," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(1), pages 1610-1630, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Simona Fiandrino & Francesco Scarpa & Riccardo Torelli, 2022. "Fostering Social Impact Through Corporate Implementation of the SDGs: Transformative Mechanisms Towards Interconnectedness and Inclusiveness," Journal of Business Ethics, Springer, vol. 180(4), pages 959-973, November.
    2. Rekha Rao-Nicholson & Htwe Htwe Thein & Yifan Zhong, 2024. "A thematic analysis of the links between multinational enterprises’ corporate social responsibility and the Sustainable Development Goals in Myanmar," Journal of International Business Policy, Palgrave Macmillan, vol. 7(2), pages 203-223, June.
    3. Jonathan Taglialatela & Kevin Pirazzi Maffiola & Roberto Barontini & Francesco Testa, 2023. "Board of Directors' characteristics and environmental SDGs adoption: an international study," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2490-2506, September.
    4. Xin‐Yu Peng & Xing‐Yun Zou & Xin‐Xin Zhao & Chun‐Ping Chang, 2024. "Understanding the behavior of ESG in both OPEC and non‐OPEC countries? The implications for sustainable development reaching," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 1940-1953, June.
    5. Ritika Mahajan & Satish Kumar & Weng Marc Lim & Monica Sareen, 2024. "The role of business and management in driving the sustainable development goals (SDGs): Current insights and future directions from a systematic review," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4493-4529, July.
    6. Cem Işık & Serdar Ongan & Hasibul Islam & Stefania Pinzon & Gul Jabeen, 2024. "Navigating sustainability: Unveiling the interconnected dynamics of ESG factors and SDGs in BRICS‐11," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(5), pages 5437-5451, October.
    7. Leonidou, Leonidas C. & Theodosiou, Marios & Nilssen, Frode & Eteokleous, Pantelitsa & Voskou, Angeliki, 2024. "Evaluating MNEs’ role in implementing the UN Sustainable Development Goals: The importance of innovative partnerships," International Business Review, Elsevier, vol. 33(3).
    8. María Garrido-Ruso & Beatriz Aibar-Guzmán & Albertina Paula Monteiro, 2022. "Businesses’ Role in the Fulfillment of the 2030 Agenda: A Bibliometric Analysis," Sustainability, MDPI, vol. 14(14), pages 1-35, July.
    9. Appiah, Michael & Li, Mingxing & Sehrish, Saba & Abaji, Emad Eddin, 2023. "Investigating the connections between innovation, natural resource extraction, and environmental pollution in OECD nations; examining the role of capital formation," Resources Policy, Elsevier, vol. 81(C).
    10. Opoku, Eric Evans Osei & Dogah, Kingsley E. & Aluko, Olufemi Adewale, 2022. "The contribution of human development towards environmental sustainability," Energy Economics, Elsevier, vol. 106(C).
    11. Chie Iguchi & Axèle Giroud & Shasha Zhao & Si Zhang, 2025. "International Business and Sustainable Development in Asia: Opportunities and Challenges for Firms and Countries," Asian Business & Management, Palgrave Macmillan, vol. 24(1), pages 1-24, February.
    12. Neves, Sónia Almeida & Marques, António Cardoso & Patrício, Margarida, 2020. "Determinants of CO2 emissions in European Union countries: Does environmental regulation reduce environmental pollution?," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 114-125.
    13. Zhang, Qianxiao & Shah, Syed Ale Raza & Yang, Ling, 2022. "Modeling the effect of disaggregated renewable energies on ecological footprint in E5 economies: Do economic growth and R&D matter?," Applied Energy, Elsevier, vol. 310(C).
    14. Nidhaleddine Ben Cheikh & Younes Ben Zaied, 2021. "A new look at carbon dioxide emissions in MENA countries," Climatic Change, Springer, vol. 166(3), pages 1-22, June.
    15. Herenia Gutiérrez‐Ponce, 2023. "Sustainability as a strategy base in Spanish firms: Sustainability reports and performance on the sustainable development goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(4), pages 3008-3023, August.
    16. Bright Akwasi Gyamfi & Asiedu B. Ampomah & Festus V. Bekun & Simplice A. Asongu, 2022. "Can information and communication technology and institutional quality help mitigate climate change in E7 economies? An environmental Kuznets curve extension," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-20, December.
    17. Aamir Javed & Bilal Haider Subhani & Asif Javed & Agnese Rapposelli, 2024. "Accessing the efficacy of green growth, energy efficiency, and green innovation for environmental performance in top manufacturing nations in the framework of sustainable development," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(6), pages 5829-5863, December.
    18. Rodolfo Damiano & Chiara Di Maria, 2024. "Exploring the role of companies and sustainability disclosure in achieving sustainable development goals: A focus on zero hunger and social inclusion," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2715-2732, July.
    19. abid, Nabila & Ceci, Federica & Razzaq, Asif, 2023. "Inclusivity of information and communication technology in ecological governance for sustainable resources management in G10 countries," Resources Policy, Elsevier, vol. 81(C).
    20. Tiyas Kurnia Sari & Mahfud Sholihin & Singgih Wijayana, 2024. "The influence of coercive pressures on reporting on SDGs during the COVID‐19 pandemic: An international study," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(6), pages 7140-7155, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:sustdv:v:33:y:2025:i:2:p:2060-2077. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.