Globalized Perspectives of Financial Integration Impacting Sustainable Growth

Abstract

This study has examined the contributing factors of sustainable environmental outcomes across a dataset of economies using panel data over the period 2000 to 2024. The analysis scrutinizes the effects of FDI/ Foreign Direct Investment, poverty ratio, political stability, along with women empowerment, by relating panel econometric procedures, involving robust regression models, lagged specifications, and diagnostic tests. The empirical analysis delineates that foreign direct investment remains statistically inconsequential across all model specifications (? = ?0.0017 and p = 0.880). It also designates that capital inflows do not directly contribute to sustainable environmental improvements. Correspondingly, political stability and the Women, Business and the Law Index are unable to establish statistically significant direct effects on environmental results. In contrast, poverty surfaces as the most reliable and statistically substantial determinant of sustainability. While in the final robust model, poverty accounts for a negative coefficient (? = ?0.3300 and p = 0.005), signifying that acute poverty levels significantly lessen environmental performance. Moreover, lagged regression outcomes authorize the absence of dynamic effects. In this analysis, lagged political stability remains insignificant (? = 0.0213 and p = 0.734), whereas FDI endures no delayed effect (? = 0.0002 and p = 0.986). Additionally, multicollinearity diagnostics authorize model stability, with the Variance Inflation Factor for all explanatory variables. Similarly, significant year effects specify that environmental outcomes are extremely sensitive to macroeconomic circumstances and worldwide events, comprising Global Financial Crisis and the COVID-19 Epidemic.