Beyond Sustainability: Empirical Evidence from OECD Countries on the Connection Among Natural Resources, ESG Performances, and Economic Development

• Autorzy: Prima Naomi , Iqbal Akbar
• Języki publikacji: EN

Abstrakty

EN

Many have seen a remarkable increase in environmental, social, and governance (ESG) practices in the context of natural resource management. ESG is practically known to help achieve the Sustainable Development Goals (SDG) with more responsible management of natural resources. Yet, limited economic literature exists to illuminate how natural resource management can affect the quality of economic development. This paper attempts to develop and test a theoretical model to understand the interlinkage between natural resource rent, ESG performance, and the quality of economic development at the country level. This study employs a data set of OECD countries during the period of 2000-2017. The path analysis model is used to define the relationship between the measured variables. Our empirical study shows a negative association between ESG performance and natural resource rent; in other words, better human development inhibits corruption and promotes improved ESG performance. This study observes the presence of bidirectional Granger causality between natural resource rent and ESG performance. It is suggested that ESG performance is more likely to be affected by the quality of institutions, rather than by the economy size. Good institutions enable the economy to reach optimum resource allocation. (original abstract)

Słowa kluczowe

EN

Rational management of natural resources; Economic growth; Granger casuality; Sustainable development

PL

Racjonalna gospodarka zasobami naturalnymi; Wzrost gospodarczy; Przyczynowość w sensie Grangera; Rozwój zrównoważony

• Czasopismo: Economics & Sociology
• Rocznik: 2021
• Tom: 14
• Numer: nr 4
• Strony: 89--106

Twórcy

autor

Prima Naomi

• Universitas Paramadina, Jakarta, Indonesia

autor

Iqbal Akbar

• Associate of Executive Program for Sustainable Partnership (EPSP) Paramadina, Jakarta, Indonesia

Bibliografia

• Appiah, M., Amoasi, R., & Frowne, D.I. (2019). Human development and its effect on economic growth and development. International Research Journal of Business Studies, 12(2), 101-109.
• Arezki, R. & Gylfason, T. (2013). Resource rents, democracy, corruption and conflict: Evidence from Sub-Saharan Africa. Journal of African Economies, 22(4), 552-569.
• Arezki, R. & Brückner, M. (2011). Oil rents, corruption, and state stability: evidence from panel data regression. European Economic Review, 55, 955-963.
• Badía, G., Pina, V., & Torres, L. (2019). Financial performance of government bond portfolios based on environmental, social, and governance criteria. Sustainability, 11, 2514. https://doi.org/doi:10.3390/su11092514
• Ben-Salha, O., Dachraoui, H., & Sebri, M. (in press). (2018). Natural resource rents and economic growth in top resource-abundant countries: a PMG estimation. Resource Policy. https://doi.org/10.1016/j.resourpol.2018.07.005
• Bhattacharyya, S. & Hodler, R. (2010). Natural resources, democracy and corruption. European Economic Review, 52, 608-621.
• Bhattacharyya, S. & Hodler, R. (2013). Do natural resource revenues hinder financial development? The role of political institutions. World Development, 57, 101-113.
• Cheung, W.W.L., Jones, M.C., Reygondeau, G., Stock, C.A., Lam, T.L. & Frölicher, T.L. (2016). Structural uncertainty in projecting global fisheries catches under climate change. Ecological Modelling, 325, 57-66.
• Cisneros-Montemayor, A., Ota, Y., Bailey, M., Hicks, C.C., Khan, A.S., Rogers, A., Sumalia, U.R., Virdin, J., & He, K.K. (2020). Changing the narrative on fisheries subsidies reform: enabling transition to achieve SDG 14.6 and beyond. Marine Policy, 117.
• Crabb, J. (in press). (2020). ESG: the financial costs of climate change. International Financial Law Review.
• Daniele, V. (2011). Natural resources and the 'quality' of economic development. Journal of Development Studies, 47(4), 545-573.
• Dong, B., Zhang, Y., & Song, H. (2019). Corruption as a natural curse: evidence from Chinese coal mining. China Economic Review, 57, 101314.
• Eccles, R.G., Ioannou, I., & Serafeim, G. (2014). The Impact of Corporate Sustainability on Organizational Processes and Performance. Management Science, 60, 11, 2835-2857. https://doi.org/10.1287/mnsc.2014.1984.
• Factor, R., & Kang, M. (2015). Corruption and population health outcomes: an analysis of data from 133 countries using structural equation modeling. International Journal Public Health, 66, 633-641. https://doi.org/10.1007/s00038-015-0687-6
• Guan, J., Kirikkaleli, D., Bibi, A., & Zhang, W. (2020). Natural resources rent nexus with financial development in the presence of globalization: is the "resource curse" exist or myth? Resource Policy, 66, 101641. https://doi.org/10.1016/j.resourpol.2020.101641
• Harnett, E.S. (2018). Responsible investment and ESG: an economic geography (Doctoral dissertation). University of Oxford, Oxford, UK.
• Ho, S., Oughlissi, R., & El Ferktaji, R. (2019). The dynamic causality between ESG and economic growth: evidence from panel causality analysis. Munich Personal RePEc Archive, MPRA Paper No. 95390.
• Hübel, B. (2020). Do markets value ESG risks in sovereign credit curve? SSRN. https://dx.doi.org/10.2139/ssrn.3501100
• Ioannou, I., Serafeim, G., & Cheng, B. (2014). Corporate social responsibility and access to finance. Strategic Management Journal, 1-23.
• Ioannou, I., & Serafeim, G. (2012). What Drives Corporate Social Performance the Role of Nation Level Institutions. Journal of International Business Studies, 48, 834-864. https://doi.org/10.1057/jibs.2012.26
• Jomnonkwao, S., Uttra, S., & Ratanavaraha, V. (2020). Forecasting road traffic deaths in Thailand: applications of time-Series, curve Estimation, multiple linear regression, and path analysis Models. Sustainability, 12(1), 395. https://doi.org/10.3390/su12010395
• Ji, J., Zou, Z., & Tian, Z. (2019). Energy and economic impact of China's 2016 economic investment plan for transport infrastructure construction: an input-output path analysis. Journal of Cleaner Production, 238, 117761. https://doi.org/10.1016/j.jclepro.2019.117761
• Khan, M.A., Khan, M.A., Ali, K., Popp, J., & Ólah J. (2020). Natural resource rent and finance: the moderation role of institutions. Sustainability, 12, 3897. https://doi.org/10.3390/su12093897
• Khan, N. H., Ju, Y., & Hassan, S.T. (2019). Investigating the determinants of human development index in Pakistan; an empirical analysis. Environmental Science and Pollution Research, 26, 19294-19304. https://doi.org/10.1007/s11356-019-05271-2
• Kinnuen, J., Androniceanu, A., & Georgescu, I. (2019). Impact on economic and political system on human development index: a computational evaluation. Proceedings of the IE 2019 International Conference, 459-466. https://doi.org/10.12948/ie2019.07.05
• Kynčlová, P., Upadhyaya, S., & Nice, T. (2020). Composite index as a measure on achieving Sustainable Development Goal 9 (SDG-9) industry-related target: the SDG-9 index. Applied Energy, 265.
• Libecap, G.D. (2018). Douglass C. North: transaction costs, property rights, and economic outcomes. NBER Working Paper No. 24585. National Bureau of Economic Research, Cambridge, MA.
• Lindsey, R. & Santos, G. (2020). Addressing transportation and environmental externalities with economics: Are policy makers listening? Research in Transportation Economics, 82, 100872.
• Maqin, R.A. & Sidharta, I. 2017. The relationship of economic growth with human development and electricity consumption in Indonesia. International Journal of Energy Economics and Policy, 7(3), 201-207.
• Mehlum, H., Moene, K., & Torvik, R. (2006). Cursed by resources or institutions? The World Economy, 29(8), pp. 1117-1131.
• Mulligan, M., van Soesbergen, A., Hole, D.G., Brooks, T.M., Burke, S., & Hutton, J. (2020). Mapping nature's contribution to SDG 6 and implication for other SDGs at policy relevant scales. Remote Sensing of Environment, 239.
• Norman, G. R. & Streiner, D. L. (2003). PDQ statistics. Hamilton, Ont: B.C. Decker.
• Okada, K. & Samreth, S. (2017). Corruption and natural resources rents: evidence from quantile regression. Applied Economics Letter, 24(20), 1490-1493.
• Park, H. & Choi, S.O. (2019). Digital innovation adoption and its economic impact focused on path analysis at national level. Journal Open Innovation: Technology, Market, and Complexity, 5(3), 56. https://doi.org/10.3390/joitmc5030056
• RobecoSAM. (2020). Country ESG Assessment (by Max Schieler).
• Shen, H., Zheng, S., Xiang, H., Tang, W., Dou, J., & Silverman, H. (2021). Stock market mispricing and firm innovation based on path analysis. Economic Modelling, 95, 330-343. https://doi.org/10.1016/j.econmod.2020.03.001
• Sinha, A. & Sengupta, T. (2019). Impact of natural resource rents on human development: what is the role of globalization in Asia Pacific countries? Resource Policy, 63. https://doi.org/10.1016/j.resourpol.2019.101413
• Sutthichaimethee, P. & Dockthaisong, B. (2018). A relationship of causal factors in the economic, social, and environmental aspects affecting the implementation of sustainability policy in Thailand: enriching the path analysis based on a GMM model. Resources, 7(4), 87. https://doi.org/10.3390/resources7040087
• Sterner, T. & Coria, J. (2011). Policy instruments for environmental and natural resource management. RFF Press, New York.
• Transparency International. (2020). https://www.transparency.org/en/cpi
• Ullman, J. B. (1996). Structural equation modeling (In: Using multivariate statistics, Tabachnick, B.G. and Fidell, L.S. Eds.). HarperCollins College Publishers, New York.
• United Nations Development Programme (UNDP). (2020). http://hdr.undp.org/en/content/human-development-index-hdi
• van der Ploeg, F. (2011). Natural resources: curse or blessing? Journal of Economic Literature, 49(2), 366-420.
• Waldo, S. et al. (2016). Regulating multiple externalities: the case of Nordic fisheries. Marine Resource Economics, 31(2), 233-257. http://dx.doi.org/10.1086/685286
• World Bank. (2020). https://data.worldbank.org/indicator/NY.GDP.MKTP.CD
• World Bank. (2000). Natural resources management strategy: Eastern Europe and Central Asia (World Bank Technical Paper No. 485). The World Bank.
• World Bank. (2006). Where is the Wealth of Nations? Measuring Capital for the 21st Century. Washington, DC: The World Bank.
• Yıldırım, S., Gedikli, A., Erdogan, S., & Yıldırım, D.C. (2020). Natural resources rents****financial development nexus: evidence from sixteen developing countries. Resources Policy, 68, 101705. https://doi.org/10.1016/j.resourpol.2020.101705
• Zaidi, et al. (2019). The impact of globalization, natural resources abundance, and human capital on financial development: evidence from thirty-one OECD countries. Resources Policy, 64, 101476. https://doi.org/10.1016/j.resourpol.2019.101476
• Zhou, X., Caldecott, B., Harnett, E., & Schumacher, K. (2020). The effect of firm-level ESG practices on macroeconomics performance. Oxford Sustainable Finance Programme, Smith School of Enterprise and the Environment, University of Oxford, Working Paper No. 20-03.

Identyfikatory

DOI

10.14254/2071-789X.2021/14-4/5