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Testing for Causality Between Economic Growth and Environmental, Social, and Governance Performance: New Evidence from a Global Sample

Author

Listed:
  • Sy-Hoa Ho

    (SouthStar Management Institute, Duy Tan University
    International School, Duy Tan University)

  • Rim Oueghlissi

    (Economic Department, FSJEGJ, University of Jendouba
    IHEC, University of Carthage)

  • Riadh El Ferktaji

    (University of Carthage (ESSAI))

Abstract

The current research explores the dynamic causality relationship between a country’s economic growth and its environmental, social, and governance performance in a global sample of 118 countries. Using annual data from 1999 to 2015, this study makes use of Granger causality test for panel data models developed by Dumitrescu and Hurlin (Economic Modelling 29(4), 1450–1460, 2012) and Han et al. (Econometric Reviews, 36, (1–3), 225–240, 2017)’s lag length selection criteria techniques to identify the causal direction across the full sample, low and lower middle-income countries (LMLI) and upper middle (UMI) and high-income (HI) countries. Our empirical findings show the presence of a bidirectional causality between environmental and social performance and economic growth, whereas unidirectional causality is from governance to growth for all countries. Unlike the clear overall pattern of the full sample results, the empirical evidence for different income groups of countries is mixed. The policy implications are provided.

Suggested Citation

  • Sy-Hoa Ho & Rim Oueghlissi & Riadh El Ferktaji, 2024. "Testing for Causality Between Economic Growth and Environmental, Social, and Governance Performance: New Evidence from a Global Sample," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7769-7787, June.
    • Handle: RePEc:spr:jknowl:v:15:y:2024:i:2:d:10.1007_s13132-023-01406-6
    DOI: 10.1007/s13132-023-01406-6
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    More about this item

    Keywords

    Environmental; Social and governance; Economic growth; Granger causality;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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