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Exploring Asia's Sustainable Future: A Panel Causality Analysis of Financial Growth, Technology, and Institutional Quality in Achieving Sustainable Development Goals

Author

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  • Ninditya Nareswari
  • Małgorzata Tarczyńska‐Łuniewska
  • Katarzyna Szopik‐Depczyńska
  • Grațiela Georgiana Noja

Abstract

Sustainable development goals (SDGs) address economic, social, and environmental issues, including in Asia. However, challenges such as inequality, environmental degradation, and governance remain. This study investigated the causal relationships between financial development, institutional quality, economic growth, technology, and foreign direct investment concerning SDGs in Asia. Using 2002–2021 data, the study began with cross‐sectional dependency and unit root tests. The Dumitrescu and Hurlin panel Granger causality analysis was then employed to examine causal relationships. The results showed a bidirectional causality between financial development, economic growth, and SDGs, indicating mutual influence. Further, technology demonstrated unidirectional causality with SDGs, indicating technology can predict SDGs, while SDGs showed unidirectional causality with institutional quality and foreign direct investment, indicating SDGs can predict institutional quality and foreign direct investment. Regional analysis covering Central, East, South, Southeast, and West Asia provided specific insights and recommendations. This study identified bidirectional causality between financial development, economic growth, and SDGs in Asia. It highlights technology's role in driving SDGs and offers region‐specific insights for addressing sustainability challenges.

Suggested Citation

  • Ninditya Nareswari & Małgorzata Tarczyńska‐Łuniewska & Katarzyna Szopik‐Depczyńska & Grațiela Georgiana Noja, 2025. "Exploring Asia's Sustainable Future: A Panel Causality Analysis of Financial Growth, Technology, and Institutional Quality in Achieving Sustainable Development Goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(4), pages 5185-5196, August.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:4:p:5185-5196
    DOI: 10.1002/sd.3395
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