Income‐linked pathways towards sustainable development goals: Analyzing the interplay of green energy, financial inclusion, and militarization in shaping aggregated economic sustainability

Abstract

AbstractThis research examines the dynamic impact of green energy (GE), financial inclusion (FI), and militarization (MS) on attaining global economic sustainability (EGS, SDG‐8) in 121 nations from 2003 to 2022. Further, explore and compare 44 high‐income, 33 upper‐middle‐income, and 44 low‐ and lower‐middle‐income countries for a better understanding of empirical and policy contributions. This study utilized second‐generation econometric methods. Consequently, it employed a two‐step system GMM model, which was validated using the D‐K regression approach. The findings revealed that green energy and financial inclusion benefit EGS across all income levels having a significant and positive impact on economic sustainability. In contrast, militarization has a negative relationship with EGS, which proves it is detrimental to EGS in the overall sample and high‐income countries. However, it positively influences economic sustainability in low‐ and lower‐middle‐income countries. Moreover, other factors, such as institutional quality and armed conflicts, have mixed effects on ESG at different income levels. This study also provides persuasive policy measures and implications for achieving global economic sustainability.