Do market-supporting institutions promote sustainable development? Evidence from developing economies

Muhammad Azam, Zied Ftiti, Ahmed Hunjra (), Wael Louhichi and Peter Verhoeven

Economic Modelling, 2022, vol. 116, issue C

Abstract: An institutional structure may affect traditional drivers of development, such as foreign direct investment and economic growth, and emerging economies’ ability to achieve sustainable development. This study expands on this literature by assessing the role of market-supporting institutions in achieving sustainable development goals in 42 developing economies. Using various measures of market-supporting institutions and a dynamic panel data approach, we find that all institutions play an important role in achieving sustainable development. Furthermore, we show that foreign direct investment and economic growth have a positive indirect effect on sustainable development by promoting the quality of market-supporting institutions and adopting renewable power generation. Our results suggest that policymakers in developing countries should focus on the robustness of their market-supporting institutions to achieve sustainable development.

Keywords: Market institutions; Renewable energy generation; Sustainable development (search for similar items in EconPapers)
JEL-codes: E01 P18 Q01 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:116:y:2022:i:c:s0264999322002620

DOI: 10.1016/j.econmod.2022.106023

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