Determinants of sustainable development: Evidence from 12 Asian countries
Abstract
Abstract This study examines the factors that determine sustainable development, measured by adjusted net saving, using panel data for 12 Asian countries for the 1990–2014 period. A panel data model is estimated using both random‐effect and fixed‐effect approaches. The Hausman test points to the superiority of the random‐effect model over the fixed‐effect model, which is apparent when the results of the two estimations are compared. The results of the random‐effect estimation show a more significant and better overall fit. These results indicate a positive and significant effect of per capita income and financial development on sustainable development and a negative and significant effect of the inflation rate, natural resource rent, and time. The results suggest that maintaining a proper natural resource balance is necessary for sustainable development.