Assessing the Pathways of Sustainable Development: A Structural Equation Modeling Investigation of Regulatory Framework, Innovation, and Economic Indicators

Sulehri, Fiaz Ahmad and Ali, Amjad (2024): Assessing the Pathways of Sustainable Development: A Structural Equation Modeling Investigation of Regulatory Framework, Innovation, and Economic Indicators.

Abstract

The concept of sustainable development holds significant importance for both current and future generations. This research examines the different pathways and relationships among sustainable development, stock market performance, foreign direct investment, regulatory framework, and innovation. The structural equation modeling technique used and analysis have been conducted using a sample of 24 countries that contribute around 65% of global greenhouse gas emissions over the period from 2000 to 2019. The empirical analysis, based on direct effects, confirms that innovation enhances stock market performance and necessitates stringent regulations. Conversely, innovation reduces foreign direct investment. Similarly, a set of regulations and stock market performance have an adverse impact on sustainable development. Additionally, the empirics of indirect effects reveal that innovation and stock market performance encourage foreign direct investment by using regulations as mediators. Moreover, innovation reduces sustainable development indirectly, considering stock market performance and foreign direct investment as mediators.

• Item Type: MPRA Paper
• Language: English
• Keywords: Stock Market Performance, Innovation, Foreign Direct Investment, Regulatory Framework, Sustainable Development, Structural Equation Model
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

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