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Special Issue "Investment, Growth and Sustainability"

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A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: 30 September 2021.

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Special Issue Editors

Dr. Pompeo Della Posta
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Guest Editor

Department of Economics and Management, University of Pisa, Pisa, Italy
Interests: macroeconomics; international monetary economics; European economic and monetary union; euro; exchange rates; fiscal policies; public debt dynamics; economic globalization; photovoltaic energy

Prof. Dr. Enrico Marelli
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Guest Editor

Department of Economics and Management, University of Brescia, Brescia, Italy
Interests: labour policies; unemployment; youth unemployment; human capital

Prof. Marcello Signorelli
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Guest Editor

Department of Economics, University of Perugia, Italy
Interests: comparative economics; economic policy; macroeconomics; transition economics; regional economics; labor economics; development economics

Special Issue Information

Dear Colleagues,

This Special Issue will include papers covering a wide range of aspects related to investment, growth, and sustainability.

Investment has collapsed in many countries of the world because of the economic consequences of the pandemic due to Covid-19. This is particularly worrying in several European countries, where in 2019 both public and private investment was still below the 2008 level (as a consequence of the double crisis experienced in 2008-09 and 2011-12 followed by a weak recovery).

Investment can be considered as capital accumulation latu senso, i.e., as resulting from both public sector policies (investment in material and immaterial infrastructures, public R&D, human capital investment, etc.) and private sector decisions (investment in equipment, machinery, construction, private R&D, etc.).

It affects growth, but some specific categories of investment are more suitable than others to secure a sustainable growth, since not all growth-enhancing investments may be sustainable in the long run. Investments in new energy sources or in new ways of exploiting the old ones, for example, are especially important for environmental sustainability, as exemplified by the New Green Deal launched by the EU. In Europe, special attention should be devoted, more broadly, to the preparation of the investment plans related to the implementation of the Next Generation EU strategy approved in 2020.

Sustainability, however, may refer also to economic, social, and financial aspects (for example, it might be relative to public debt), other than the environment.

Growth is traditionally considered in its economic dimension, namely, as resulting from GDP dynamics, but when addressing issues of sustainability, in particular of social sustainability, the more comprehensive concept of development (together with the associated indexes including also the HDI and inequality-adjusted development indexes) might also be relevant.

Theoretical or empirical papers related to the concepts described above and applying to developed, emerging or developing countries or regions are of particular interest for this Special Issue.

Dr. Pompeo Della Posta
Prof. Dr. Enrico Marelli
Prof. Marcello Signorelli
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Sustainability is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1900 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

public investment
private sector investment
economic growth
economic development
human development
environmental sustainability
social sustainability
debt sustainability
economic and financial sustainability
sustainable growth and development policies

Published Papers (10 papers)

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Research

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Open AccessArticle

The Use of Decomposition Methods to Understand the Economic Growth Gap between Latin America and East Asia

Beatriz Barrado

Gregorio Gimenez

and

Jaime Sanaú

Sustainability 2021, 13(12), 6674; https://doi.org/10.3390/su13126674 - 11 Jun 2021

Viewed by 522

Abstract

Understanding how growth factors contribute to explaining the large differences in growth rates across countries remains an important research agenda. The common approach to exploring this issue is based on the use of multiple linear regression analyses. This work contributes to growth literature by applying a new perspective based on the use of variance decomposition procedures: Shapley–Owen–Shorrocks and Oaxaca–Blinder. These methodologies have four main advantages with respect to traditional methodologies: they make possible the quantification of the relative contribution of each factor to economic growth, they allow us to estimate the efficiency in the use of the endowments of each factor, they can be used with any functional form and they can be used with estimation methods that are robust regarding endogeneity issues. We illustrate these advantages by analyzing the causes of the economic growth gap between Latin America and East Asia over the period 1980–2014. We find that the economic growth divergence between the two regions can be primarily explained by the differences in institutions and physical capital. In addition, the results indicate that the higher East Asian performance is not only due to its higher levels of endowments in these factors, but also to the higher efficiency in its use. We connect our results with the 2030 Agenda for Sustainable Development. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

Open AccessArticle

Defence Expenditure–Government Debt Nexus in the Context of Sustainability in Selected Small European Union Countries

Gitana Dudzevičiūtė

Vida Česnuitytė

and

Dalia Prakapienė

Sustainability 2021, 13(12), 6669; https://doi.org/10.3390/su13126669 - 11 Jun 2021

Viewed by 473

Abstract

This paper explores the relationship between defence expenditure and government debt in small European Union countries that are members of NATO, such as Luxembourg, Lithuania, Latvia, Estonia, DRenmark, Slovakia, and Slovenia. The investigation used Eurostat data in relation to gross government debt, as well as NATO information regarding defence expenditure as a share of GDP and its distribution by main category for the period between 2005 and 2019. The authors applied descriptive statistics and methods of multivariate statistics: Spearman’s correlation, the ANOVA test, and Life tables. Taking into consideration the tendencies of variables in all examined countries, the results show that the share of defence expenditure in GDP correlates statistically significantly and negatively with government gross debt. Latvia, Slovakia, and Slovenia revealed statistically significant relationships between variables, while Luxembourg, Denmark and Lithuania insignificant. In Estonia, the relationship between variables is strong and positive. Additionally, the investigation shows that, whether for increasing defence expenditure or for stable or decreasing defence expenditure, the trajectories of government debt have no clear interrelation in explored countries. Therefore, the cause of government debt by means of defence expenditure alone can only be partially explained. The insights that were drawn from this study could be applied to government finance management processes, as well as to ensure both national security and the achievement of the Sustainable Development Goals 2030. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

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Open AccessArticle

Investment Portfolio, Democratic Accountability, Poverty and Income Inequality Nexus in Pakistan: A Way to Social Sustainability

Muhammad Shahid Hassan

Haider Mahmood

Muhammad Ibrahim Saeed

Tarek Tawfik Yousef Alkhateeb

Noman Arshed

and

Doaa H. I. Mahmoud

Sustainability 2021, 13(11), 6411; https://doi.org/10.3390/su13116411 - 04 Jun 2021

Viewed by 587

Abstract

Institutions help to streamline the economic activity-related procedures, where government intervention might be involved. Institutions also play a significant role in social sustainability. The findings using the Autoregressive Distributed Lag approach to cointegration for the period from 1984–2019 reveal that investment portfolio and democratic accountability reduce poverty in Pakistan both in the long and short run. Moreover, democratic accountability helps to reduce income inequality, but the investment portfolio’s role is not significant. The literacy rate helps to reduce income inequality, and inflation increases poverty and income inequality. The remittances increase income inequality, and urbanization increases poverty. To eradicate poverty and income inequality, the governments should be accountable for their actions to the general public while they remain in power. If they do not deliver as per their manifestoes, they will not be reelected in the next election. Moreover, there is a dire need to redefine the role of an investment portfolio to reduce the risk of investment. So, investments would increase economic activities and could reduce poverty and income inequality. This study contributes to the literature by inquiring about the role of the investment portfolio and democratic accountability in social sustainability by reducing poverty and income inequality. This study only considers Pakistan’s economy due to limitations of poverty data availability in other countries. The scope could further be broadened by accessing data for a wider Asia region to test the role of the investment portfolio and democratic accountability to reduce poverty and income inequality. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

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Open AccessArticle

Are International Indices Good Predictors of Economic Growth? Panel Data and Cluster Analysis for European Union Countries

Manuel Carlos Nogueira

and

Mara Madaleno

Sustainability 2021, 13(11), 6003; https://doi.org/10.3390/su13116003 - 26 May 2021

Viewed by 932

Abstract

Every year, news about the publication of rankings and scores of important international indexes are highlighted, with some of the most prestigious being the Global Competitiveness Index (GCI), the Human Development Index (HDI), the Ease of Doing Business (EDB), the Environmental Performance Index (EPI) and the Global Entrepreneurship (GEI). A country’s progression in these indices is associated with economic growth, especially since several empirical studies have found evidence to reinforce these beliefs, the indices having been built based on the scientific literature on economic growth. Building a database on these indices for European Union countries between 2007 and 2017 and using panel data methodologies and then 2SLS (Two-Stage Least Squares) to solve the problem of endogeneity, we verify empirically through panel data estimates, what is the relationship between the mentioned indices and the European Union countries’ economic growth for the period. However, as the European Union is made up of diverse countries with different economic and social realities, we divided the countries into six clusters and made an individual interpretation for each one. We found that human development and competitiveness play an important role in economic growth, and entrepreneurship also impacts this growth. Regarding income distribution, applying the Gini index, we found that only human development mitigates inequalities. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

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Open AccessArticle

Does Foreign Institutional Equity Participation Instigate Sustainable Corporate Investment Efficiency? Evidence from Emerging Economies

Sabahat Riaz

Mohamed Hisham Hanifa

and

Fauzi Zainir

Sustainability 2021, 13(8), 4190; https://doi.org/10.3390/su13084190 - 09 Apr 2021

Cited by 1 | Viewed by 789

Abstract

This study examines the impact of overall foreign institutional equity participation and its two types—foreign institutional pressure-resistant and pressure-sensitive—on firm sustainable investment efficiency for non-financial listed domestic firms of three emerging economies over the period of 2009–2018, using an unbalanced panel of 733 firms with 4468 firm-year observations. It also investigates the impact of varying levels of foreign equity participation on investment efficiency. We used the regression estimation technique with robust standard errors clustered at the firm level. We also used the second-stage instrumental variable (IV) method to control potential endogeneity. Empirical findings reveal that overall foreign institutional equity participation and foreign institutional pressure-resistant ownership have a positive and significant impact on corporate investment efficiency, whereas foreign institutional pressure-sensitive ownership has a positive but insignificant impact. When we divided the overall institutional foreign equity ownership and its two types into five levels, we found a positive and significant impact of overall foreign institutional ownership at all levels. The foreign institutional pressure-resistant ownership has a positive and significant impact on investment efficiency when it is greater than 10%. However, we found a weak relationship of foreign institutional pressure-sensitive equity ownership with investment efficiency at all varying levels of investments. These results are robust when we controlled for endogeneity. Our results have implications for policymakers, regulators, academicians, and potential foreign equity participants. These results can be generalized to those emerging economies that have the potentials for attracting foreign equity inflows. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

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Open AccessArticle

The Negative Impact of Uncertainty on R&D Investment: International Evidence

Yuchen Lin

Daxin Dong

and

Jiaxin Wang

Sustainability 2021, 13(5), 2746; https://doi.org/10.3390/su13052746 - 03 Mar 2021

Viewed by 530

Abstract

Previous studies have not provided consistent conclusions regarding the impact of uncertainty on research and development (R&D) investment. While most of the previous literature has focused only on one or a small group of countries, this study examines the effect of uncertainty on R&D on the basis of a sample covering 109 countries from 1996 to 2018. The country-level uncertainty is measured using the “World Uncertainty Index”, which has recently been developed by Ahir et al. (2018). By estimating a panel data fixed-effects regression model, it is found that uncertainty has a significantly negative impact on R&D investment at the country-level aggregate scale. We also find that uncertainty depresses the number of R&D personnel and patent applications, although the effect on R&D personnel is not statistically significant. These findings imply that high uncertainty poses a considerable threat to global innovation and technological progress. Heterogeneity analyses across different country groups demonstrate that, although the impact of uncertainty on R&D is not statistically significant in some country groups, its effect is always negative and no positive effect is observed. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

Open AccessArticle

Is Gender Inequality a Barrier to Economic Growth? A Panel Data Analysis of Developing Countries

Amaia Altuzarra

Catalina Gálvez-Gálvez

and

Ana González-Flores

Sustainability 2021, 13(1), 367; https://doi.org/10.3390/su13010367 - 03 Jan 2021

Cited by 2 | Viewed by 1448

Abstract

This study provides empirical evidence about the effects of various dimensions of gender inequalities (education, labour market and institutional representation) on economic growth. We use data from the World Bank Development Indicators database for the period 1990–2017. We initially use a large panel of 105 developing countries. Subsequently we study a panel with the sub-Saharan African (SSA) countries since this region is one of the poorest regions in the world. We estimate cross-country and panel regressions. The results suggest that gender equality in education contributes to economic growth and this is a common feature in developing countries. The contribution of equality in education to growth seems to be greater in the SSA countries than in the entire sample of developing countries. The female–male ratio of labour market participation is not statistically significant. We also find a significant link between the presence of women in parliaments and growth in the sample of all developing countries, while this relationship is negative for the SSA countries. It is likely that despite the increased participation of women in the political arena in these countries, women may still encounter major obstacles to altering political priorities and affecting economic growth. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

Open AccessArticle

Major Crises of the XXIst Century and Impact on Economic Growth

Iulia Cristina Iuga

and

Anastasia Mihalciuc

Sustainability 2020, 12(22), 9373; https://doi.org/10.3390/su12229373 - 11 Nov 2020

Cited by 4 | Viewed by 614

Abstract

Global economic growth is noted to have been severely affected by the Great Recession in 2009, reaching its lowest level since the series began in 2019. This low was exceeded in 2020, in the sense that the level of economic growth in Q1 and Q2 2020 is well below 2009 due to countries’ efforts to stop the COVID-19 pandemic. Cases of coronavirus that have occurred since February–March 2020 have started to produce significant effects on economic growth, and the evolution of the economic growth indicator is in decline for the countries analysed. The article is aiming to develop two models (using Empirical Regression Model) that analyse the influence of macroeconomic indicators on economic growth. Our study covers EU member countries in Central and Eastern Europe from 2001–2020 Q2. Using the same variables and coefficients for both models, six for the first model and seven for the second model with the addition of coronavirus cases, we see a change in the behaviour of independent variables. The authors consider that this variable influences the economic situation in a country because it has caused the change in the unfavourable direction of certain macroeconomic indicators with a direct influence on economic growth. By adding cases of coronavirus (Cc) the equation becomes broader and contains several variables that explain the evolution of economic growth. Each of the indicators changes its value, but it is noted that variables with negative coefficients decrease further (e.g., Cs, GvS). Our findings in this article confirm that of all the determinants analysed, CsGw, Ret, GvS, and Cc overwhelmingly influence economic growth. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

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Open AccessArticle

The Dynamic Relationship between Inequality and Sustainable Economic Growth

Hwan-Joo Seo

HanSung Kim

and

Young Soo Lee

Sustainability 2020, 12(14), 5740; https://doi.org/10.3390/su12145740 - 16 Jul 2020

Cited by 5 | Viewed by 901

Abstract

This study empirically tests the effects of income inequality on growth for 43 countries from 1991 to 2014 based on a cumulative growth model. The results show that, first, the estimation results using a reduced equation reveal a positive correlation between the income inequalities of lagging countries and the respective growth gaps with the frontier country. This confirms that the increase in income inequality negatively affects growth. Secondly, a cumulative growth model using 3SLS estimation shows that income inequality has a negative effect only on investment. However, we fail to find correlations between technological innovation and income inequality and between human capital accumulation and income inequality. Considering that investment has a positive impact on productivity, we conclude that income inequality has a negative impact on investment and that the resulting sluggish investment has a negative impact on productivity, which in turn negatively influences growth. Third, contrary to Kaldor and Barro’s prediction, we find that income inequality in developing countries is negatively correlated with growth, particularly for investment. The effects of income inequality on investment are found to be similar in both developed and developing countries. We also find region-specific differences in the paths through which income inequality affects sustainable economic growth. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

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Open AccessTechnical Note

The Tragedy of the Commons as a Prisoner’s Dilemma. Its Relevance for Sustainability Games

Alessio Carrozzo Magli

Pompeo Della Posta

and

Piero Manfredi

Sustainability 2021, 13(15), 8125; https://doi.org/10.3390/su13158125 - 21 Jul 2021

Viewed by 486

Abstract

In the current battle for sustainability and climate, understanding the nature of sustainability games is of paramount importance, especially to inform appropriate policy actions to contrast the harmful effects of global climate change. Relatedly, there is no consensus in the literature on the proper game-theoretic representation of the so-called Tragedy of the Commons. A number of contributions have questioned the prisoner’s dilemma as an appropriate framework. In this work, we provide a representation that reconciles these two positions, confirming the ultimate nature of the Tragedy as a prisoner’s dilemma, rather than a coordination issue, and discuss the ensuing implications for sustainability policy interventions. Full article

(This article belongs to the Special Issue Investment, Growth and Sustainability)

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