Optimal capital investment structure and sustainable development: Evidence from China

Yiyang Cheng, Shaofeng Ru and Gavin Kader

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: This paper studies how capital structure (physical, human, environmental, and social capital) affects sustainable development. This paper constructs a model for optimal sustainable development and deduces the necessary condition is that the input ratio of per capita human capital, environmental capital, and social capital are equal to their respective output elasticity ratios. Using data from China (2007–2020), empirical tests confirm smaller deviations between output elasticity ratios and the actual input ratio are associated with higher sustainable development. This paper concludes that, unlike physical capital, investment in human, environmental, and social capital promote sustainable development.

Keywords: Sustainable development; Capital structure; Human capital; Environmental capital; Social capital; Deviation degree (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S154461232300836X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s154461232300836x

DOI: 10.1016/j.frl.2023.104464

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().