The Impact of Research and Development Expenditures on ESG Model in the Global Economy

Abstract

We estimate the value of Research and Development Expenditures as a percentage of GDP-RDE in the context of Environmental, Social and Governance-ESG model. We use the ESG World Bank database. We analyze data from193 countries in the period 2011-2020. We apply a set of econometric techniques i.e. Pooled Ordinary Least Squares-OLS, Panel Data with Random Effects, Panel Data with Fixed Effects, Weighted Least Squares-WLS. We found that the level of RDE is positively associated, among others, to “Nitrous Oxide Emissions” and “Scientific and Technical Journal Articles”, and negatively associated, among others to “Heat Index 35”, “Maximum 5-day Rainfall”. Furthermore, we perform a cluster analysis with the application of the k-Means algorithm optimized with the Elbow Method. The results show the presence of four clusters. Finally, we confront eight different machine-learning algorithms to predict the future value of RDE. We find that Linear Regression is the best predictive algorithms. RDE is expected to growth on average of 0.07% for the analysed countries.

<strong>The Determinants of </strong> <strong> Emissions in the Context of ESG Models at World Level</strong>

“…In the following article, we look at the determinants of COE in the context of the ESG model. The affirmation of the ESG model has led to significant innovations from the point of view of the environment, the social dimension and governance [1][2][3][4][5][6]. However, the connection between COE and ESG is far from linear and sometimes shows an irrational dimension due to the presence of phenomena such as greenwashing, which distort the attribution of ESG-type rankings.…”

The Impact of Government Expenditure on Education in the ESG Models at World Level

“…It is the managerial training that tends to determine the ability of companies to perform well or badly based on certain criteria, for example in their choice between profit maximization or stakeholder maximization [1], [2], [3], [4]. The investigation of the role of education in necessary for a better comprehension of the impacts of ESG models at world level [5], [6], [7], [8], [9], [10], [11], [12], [13], [14], [15], [16]. However, it is necessary to distinguish between developing and industrialized countries.…”

The Role of GDP Growth in the ESG Approach at World Level

“…However, the theoretical positive connection between the G [4], [5], [6], [7], [8], [9] and S component of the ESG model and the GDPG appears more plausible. Furthermore, the ESG model has also an impact on entrepreneurship [10] and R&D at country level [11]. The article continues as follows: the second section presents a brief analysis of the literature, the third paragraph contains the econometric analysis, the fourth section show the result of the clusterization with the application of the k-Means algorithm, the fifth section compares the performance of eight machine learning algorithms for the prediction of the future value of GDPG, the sixth paragraph concludes.…”