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Political Risk and Sustainable Development: Digitization and Environmental Policy Stringency

Author

Listed:
  • Chong Zhang
  • Menglu Zhang
  • Yunqiu Zhan
  • Jiale Yan

Abstract

Emerging economies are consistently targeting advanced approaches to attain sustainable development while reducing their risk exposure and factors simultaneously. This research examines the influence of political risk, digitization and environmental policies, along with a set of economic and environmental factors, on the sustainable development of the BRICS economies. For the period from 1990 to 2020, the diagnostic tests confirmed a mixed order of integration. Therefore, the autoregressive distributed lag test is utilized and the results show that political risk, mineral resources and exports are harmful to sustainable development in the short run but significantly enhance sustainable development in the long run. On the other hand, environmental technologies are positively associated with sustainable development in the short run but transform into negative development in the long run. These diverse influences occur in the short and long run. The results indicate a consistent influence of digitization (positive) in both the short and long run. The long-run results are authenticated using panel fully modified ordinary least squares (FMOLS). Furthermore, the panel causality test validates diverse inferences regarding the causal association between the variables. Following the empirical outcomes, we recommend policies regarding equitable implementation of digital technologies, enhanced investment in environmental and green technologies, equitable resource management and a reduction in political risk, which could stimulate sustainable development.

Suggested Citation

  • Chong Zhang & Menglu Zhang & Yunqiu Zhan & Jiale Yan, . "Political Risk and Sustainable Development: Digitization and Environmental Policy Stringency," Politická ekonomie, Prague University of Economics and Business, vol. 0.
    • Handle: RePEc:prg:jnlpol:v:preprint:id:1457
    DOI: 10.18267/j.polek.1457
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    1. Jeffrey D. Sachs & Guido Schmidt-Traub & Mariana Mazzucato & Dirk Messner & Nebojsa Nakicenovic & Johan Rockström, 2019. "Six Transformations to achieve the Sustainable Development Goals," Nature Sustainability, Nature, vol. 2(9), pages 805-814, September.
    2. Elizabeth Asiedu, 2006. "Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability," The World Economy, Wiley Blackwell, vol. 29(1), pages 63-77, January.
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