International Journal of Sustainable Economy (12 papers in press)

Regular Issues

• Asymmetric effect of remittances on economic growth: a sectoral analysis in Nigeria  
  by Taiwo Akinlo, James Temitope Dada, Mosab I. Tabash, Mamdouh Abdulaziz Saleh Al-Faryan 
  Abstract: Nigeria receives the most remittances in Sub-Saharan Africa and ranks among the top ten globally. The government needs to capitalise on this increase in remittance inflows to promote economic growth and diversification across various sectors of the economy. Therefore, this study examines the asymmetric impact of remittances on aggregate output and sectoral growth in Nigeria from 1980 to 2022, employing both the linear and NARDL approaches. The study found that the relationship between remittances and sectors is asymmetric, except for the construction sector, which exhibits a symmetric relationship with remittance inflow. The study found that an increase in remittances benefits the economic growth, agricultural, trade, and transport sectors, while the manufacturing sector does not respond to remittance shocks. Finally, the study found that the negative shock from remittances is harmful to economic growth and the service sector. Therefore, it is expected that policymakers will introduce and implement policies to ensure the smooth inflow of remittances, promoting steady economic growth and sectoral development.
  Keywords: capital inflow; remittances; economic growth; asymmetric; real sector; agriculture; service; manufacturing; transportation; construction; Nigeria.
  DOI: 10.1504/IJSE.2026.10073647
   
  
• Triggering Sustainable Competitiveness through Institutional Quality: how Human Capital and Digitalisation Change This Game  
  by Tomáš Fišera, Bernard Vaní?ek 
  Abstract: Understanding the interplay between institutional quality, digitalisation and human capital is crucial for fostering sustainable competitiveness, particularly in light of recent global challenges. However, they are often studied separately, and there is a lack of comprehensive studies examining their interaction. This study fills this gap by analysing their direct and mediating effects in 24 EU countries (2017-2022) using PLS-SEM. While institutional quality increases digitalisation and human capital, human capital alone does not enhance sustainable competitiveness or mediate this relationship. The findings emphasise the importance of investing in digital infrastructure and institutions to better utilise human capital for more sustainable competitiveness.
  Keywords: Sustainable competitiveness; Institutional quality; Digitalization; Human capital; PLS-SEM.
  DOI: 10.1504/IJSE.2026.10074437
   
  
• Measuring the sustainable human development: evidence from different income-grouped countries using panel data  
  by Souvik Dey 
  Abstract: This scientific study develops a comprehensive framework for measuring Sustainable Human Development by analysing the interaction between human development and sustainability indicators across economies of varying income levels. Using Two-Stage Least Squares (2SLS) and multilayer canonical correlation analysis, the research addresses endogeneity concerns and identifies key sustainability factors such as internet access in schools, HIV infection rates, universal health coverage, clean cooking fuel usage, and electricity access - as critical drivers of human development. The comparison between the Human Development Index (HDI) and the proposed Sustainable Human Development Index (SHDI) reveals disparities: low-income countries show a significant lag in SHDI, middle-income countries demonstrate moderate convergence, and high-income countries exhibit high HDI but lower SHDI due to environmental costs. It can be stated that the Sustainable Human Development Index (SHDI) is a comprehensive measurement of progress than the HDI, observing the hidden gaps and emphasizing the importance of balanced development that combines economic growth with long-term social sustainability.
  Keywords: sustainability; human development index; HDI; endogeneity; two-stage least squares; 2SLS; canonical correlation; sustainable human development indicators.
  DOI: 10.1504/IJSE.2026.10075193
   
  
• Dynamic relationship between climate policy uncertainty and inflation: a time-varying Granger causality approach  
  by Opeoluwa Adeniyi Adeosun, Suhaib Anagreh, Mosab I. Tabash 
  Abstract: The study investigates the predictive relationship between US climate policy uncertainty (CPU) and four key components of inflation (energy, food, headline, and official core) utilising the rolling-window and recursive-evolving algorithms versions of Shi et al.’s time-varying Granger approach. Findings show that the CPU provides information about the future values of headline, core, and food inflation, and all inflation components exert significant predictive powers on the CPU, implying bidirectional relationships. The paper date-stamps significant periods of significant predictability, aligning with main climate-related events such as Kyoto Protocol debates, US-China climate deal, the UN climate action summit, and the Environmental Protection Agency’s GHG emissions standards. The findings are robust and consistent with the baseline results when controlling for the influence of economic policy uncertainty in the CPU-inflation nexus. The study recommends incorporating CPU into central banks’ inflation forecasting models, enhancing climate policy communication, supporting climate-resilient economic policies, and strengthening climate-related information practices.
  Keywords: climate; uncertainty; inflation; causality; forecasting; monetary; predictive linkages; non-linearity; date-stamping; policies.
  DOI: 10.1504/IJSE.2026.10075412
   
  
• Drivers of currency crises in Egypt: a political-economy approach  
  by Mona Hamdy, Mona Fayed, Asmaa Ezzat 
  Abstract: Given Egypt’s history of currency crises, this paper aims to identify the key drivers behind these episodes by focusing on the role of both economic and political-economy variables. Using a probit analysis and annual data over the period (19772021), the findings suggest that real exchange rate overvaluation, declining foreign reserves, falling portfolio investment, and rising external debt are also significant economic predictors for currency crises incidence in Egypt. In addition, the findings indicate that fixed exchange rate regimes, low levels of democracy, and the absence of capital controls significantly increase the likelihood of a crisis. Moreover, it is evident that accounting for these variables, along with the economic indicators, improves the model’s ability to predict currency crises.
  Keywords: currency crises; exchange market pressure index; political economy; probit model; Egypt.
  DOI: 10.1504/IJSE.2027.10075872
   
  
• Asymmetric effect of global uncertainty on trade between China and selected Sub-Saharan African economies  
  by Winnie O. Arazu, Oliver E. Ogbonna, Jonathan E. Ogbuabor, Mulatu F. Zerihum 
  Abstract: The emergence of China as a major trade partner to the Sub-Saharan African (SSA) region requires that policymakers understand how global economic policy uncertainty (GEPU) impacts trade with China. Using the nonlinear ARDL framework, this study investigates the asymmetric effects of GEPU on trade between China and six selected SSA economies, namely Angola, Ghana, Kenya, Nigeria, South Africa, and Tanzania, for the period 2000Q1 to 2022Q4. The findings show that the positive effects of declining GEPU are particularly pronounced in Nigeria, Ghana, and Tanzania in the long-run, while South Africa, Kenya, Ghana, and Angola exhibit stronger negative responses to rising GEPU in the short-run. Moreover, China trade flows to SSA overwhelmingly respond strongly to declines in uncertainty than to comparable increases, supporting the asymmetry argument. The study suggests that SSA economies should diversify their economic base and trading partners to mitigate reliance on China and safeguard against negative GEPU impacts.
  Keywords: economic policy uncertainty; international trade; asymmetric effect; nonlinear ARDL model; Sub-Saharan Africa; SSA; China.
  DOI: 10.1504/IJSE.2027.10078145
   
  
• Sustainable development goals and frequency-based examination of unemployment using Google Trends data: evidence from G8 countries  
  by Muhammad Shahbaz, Süleyman Gürbüz, Murat Ergül, Cüneyt Kiliç, Ahmet Tayfur Akcan, Özgür Topkaya 
  Abstract: This study discusses unemployment and job seeking activity of individuals on the internet in the scope of sustainable development goals which set targets to be met by 2030. Timely assessment of targets is important and digitalisation paved new ways for analyses in this field which also relate to sustainability. The surge in job losses caused by the pandemic, regional conflicts and trade tensions are bringing unemployment and related issues to the forefront of policymakers’ agendas. This study utilises monthly Google Trends data from January 2007 to December 2021 to examine unemployment in G8 countries during this period. While analysing the relationship between variables, the maximal overlap discrete wavelet transform (MODWT) method, which helps to examine both the time and frequency dimensions of the series, was used. Then, the panel Fourier Toda-Yamamoto causality test was applied to determine the causality relationship between Google Trends data and the unemployment rate in the relevant countries. The results indicate that Google searches related to the term ‘unemployment’ are correlated with unemployment rates in most of the countries studied at different frequencies. Reliability of the results also indicates that besides institutional data, analyses based on Google Trends data can be an efficient way.
  Keywords: sustainable development goals; Google Trends; unemployment; wavelet theory; panel data analysis.
  DOI: 10.1504/IJSE.2027.10079843
   
  
• Unravelling the ESG-financial performance nexus  
  by Anjali Mishra, Alka Pandey, Aakriti Sahu, Debasis Mohanty 
  Abstract: This research examines the impact of ESG score on corporate financial performance of 73 Indian firms, based on a dataset comprising 899 observations. The study found that ESG scores had no discernible effect on return on assets or Tobins Q using panel regression models (pooled OLS, fixed effects, and random effects). Advanced machine learning techniques, such as random forest and XGBoost, exhibited greater accuracy than linear models, achieving higher R² and lower RMSE. Furthermore, SHAP analysis showed that historical profitability, rather than ESG metrics, is the best indicator of current ROA. The results indicate that investors should proceed with caution when it comes to ESG since it does not provide significant financial benefits in this context. While managers are advised to strategically allocate resources to ensure that ESG strategies are not at risk of profitability, policymakers are advised to create sustainability incentives that do not undermine financial stability.
  Keywords: ESG score; return on assets; ROA; Tobin Q; sustainability; machine learning.
  DOI: 10.1504/IJSE.2027.10080485
   
  
• Does ESG performance impact firms' financial performance? Evidence from Iberian firms  
  by José Luís Martins, Inês Lisboa , Inês Fonseca  
  Abstract: This study examines the impact of environmental, social, and governance (ESG) performance on firms’ financial performance. To this end, a sample of 101 Portuguese and Spanish firms over the period 2014-2024 is analysed. Financial performance is measured through three alternative profitability ratios (ROA, ROE, ROS), while ESG is assessed through the overall ESG score and its subcomponents. Using panel data from Iberian companies, econometric models were estimated using either fixed-effects or random-effects specifications. The results show that ESG scores have increased over the period analysed and that Spanish firms exhibit higher ESG performance than Portuguese firms. Moreover, the overall ESG score does not affect firms’ financial performance. However, when ESG subcomponents are analysed separately, the effects differ across countries. In Spain, the environmental subcomponent positively impacts firms’ financial performance, in line with stakeholder theory, whereas the social subcomponent shows a negative effect. In Portugal, the environmental subcomponent negatively affects return on sales, suggesting higher costs and reduced firm efficiency in the short term.
  Keywords: non-financial information; environmental; social; and governance; ESG; financial performance; return; profitability; Iberian firms.
  DOI: 10.1504/IJSE.2027.10080487
   
  
• The role of green technology innovation in major Asian economies: an environmental Kuznets curve framework  
  by Lien Thi Hoa Do, Phuong Vo Hang Hoang 
  Abstract: The study examines the influence of economic growth, green technology innovation, energy intensity, trade openness, population on greenhouse gas emissions using annual data of major economies in Asia from 1990 to 2022. Employing econometric methods, including augmented mean group (AMG), common correlated effects mean group (CCEMG), quantile regression, the paper shows an inverted U-shaped relationship between environmental quality and economic growth. The finding aligns with prior studies, suggesting that economic growth aggravates the environmental degradation when GDP per capita is low. However, once a critical income threshold is surpassed, economic growth contributes to improvements in environmental quality. Also, the paper shows a positive relationship between energy intensity, green technology innovation and environmental degradation. This study can contribute to empirical studies: confirming the validity of the environmental Kuznets curve (inverted U) hypothesis. Drawing upon these results, proposed policies for major countries should prioritise the promotion of green technology innovation and improving energy efficiency to improve environmental quality in large-scale Asian countries.
  Keywords: green technology innovation; GHG emissions; environmental Kuznets curve; EKC; major economies; Asia; augmented mean group; AMG.
  DOI: 10.1504/IJSE.2027.10080492
   
  
• The ESG patience premium: investor tolerance and market adjustment dynamics in European hospitality  
  by Carlos Iranzo, Alba M. Priego, Juan C. Roca, David Toscano 
  Abstract: This study examines how ESG performance shapes not only firm value but also the dynamics through which capital markets incorporate sustainability information in the European hospitality sector. Using a panel of 499 firm-year observations from listed hospitality firms across 22 European countries over 2006-2023, we combine machine-learning valuation models with a partial adjustment framework to estimate fundamental firm values and analyse how market valuations converge toward them over time. Our central finding is that high-ESG hospitality firms exhibit significantly slower market value adjustment toward estimated fundamentals, a mechanism we conceptualise as an ESG patience premium, reflecting greater investor tolerance for temporary valuation deviations among sustainability-oriented firms. Shock-convergence analysis further reveals that high-ESG firms display greater persistence in valuation gaps following large valuation disruptions, suggesting that investors attribute long-term value potential to sustainability-oriented firms and allow their valuations more time to stabilise.
  Keywords: ESG performance; enterprise value; partial adjustment framework; investor patience premium; European hospitality.
  DOI: 10.1504/IJSE.2027.10080706
   
  
• What drives environmental sustainability in fragile economies? The role of green finance, FDI, and economic growth with governance quality as a moderator  
  by Partha Acharjee, Debasis Neogi, Ishtiaq Mainuddin, Jayanta Acharjee, Sauvik Chakraborty 
  Abstract: This study examines the impact of green finance, economic growth (GDP), and foreign direct investment (FDI) on CO2 emissions per capita in fragile economies, with governance acting as a moderating factor. Utilising the two-step system generalised method of moments (GMM), the analysis reveals that GDP and FDI are significant drivers of CO2 emissions per capita. While green finance shows potential to promote sustainability, its effectiveness is contingent on the presence of strong governance frameworks. In the absence of robust governance mechanisms, green finance may lead to greenwashing rather than delivering genuine environmental benefits. The study underscores the critical importance of governance in ensuring the credibility and impact of green finance initiatives. Based on these results, we recommend strengthening governance structures and implementing transparent monitoring systems to enhance the effectiveness of green finance. The paper concludes by addressing the study’s limitations and offering directions for future research.
  Keywords: green finance; CO2 emissions; foreign direct investment; FDI; governance quality; environmental Kuznets curve; EKC; pollution haven hypothesis; PHH; system GMM; greenwashing; fragile states; principal component analysis; PCA; sustainable development; Paris Agreement.
  DOI: 10.1504/IJSE.2027.10081270