The Impact of Voice and Accountability in the ESG Framework in a Global Perspective

Abstract

We estimate the value of Voice and Accountability-VA in the context of the Environmental, Social and Governance-ESG data of the World Bank using data from 193 countries in the period 2011-2021. We use Panel Data with Fixed Effects, Panel Data with Random Effects and Pooled Ordinary Least Squares-OLS. We found that the level of VA is positively associated, among others, to “Maximum 5-Day Rainfall”, and “Mortality Rate Under 5” and negatively associated, among others, to “Adjusted Savings: Natural Resources Depletion”, and “Annualized Average Growth Rate in Per Capita Real Survey Mean Consumption or Income”. Furthermore, we apply the k-Means algorithm optimized with the Elbow Method. We found the k-Means useless due to the low variance of the variable among countries with the result of a hyper-concentration of elements in a unique cluster. Finally, we confront eight machine-learning algorithms for the prediction of VA. Polynomial Regression is the best predictive algorithm according to R-Squared, MAE, MSE and RMSE. The level of VA is expected to growth on average of 2.92% for the treated countries. JEL Codes: D7, D70, D72, D73, D78.

The Quest for an ESG Country Rank: A Performance Contribution Analysis/MCDM Approach

“…Considering the potential complexity of using information entropy and Clifford algebra, we provide more detailed information on the steps we take for the proposed methodology used in the current paper, represented by the following Figure 1. Costantiello and Leogrande [29] conducted research to determine the impact of R&D expenditures on the global economy's ESG model, utilizing various economics techniques such as Pooled Ordinary Least Squares (OLS), Panel Data with random effects and fixed effects, and Weighted Least Squares (WLS). Based on the results, it was evident that R&D had the greatest positive impact, while the health index had the greatest negative impact.…”

“…Costantiello and Leogrande [29] conducted research to determine the impact of R&D expenditures on the global economy's ESG model, utilizing various economics techniques such as Pooled Ordinary Least Squares (OLS), Panel Data with random effects and fixed effects, and Weighted Least Squares (WLS). Based on the results, it was evident that R&D had the greatest positive impact, while the health index had the greatest negative impact.…”

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

“…emissions tend to grow with the value of GDPG especially for African and Asian countries. 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 Role of Political Stability in the Context of ESG Models at World Level

“…In fact, recent political events have highlighted a difficulty of the western institutions to avoid the manifestation of political violence and terrorism. Especially in the USA, events that have highlighted political and racial violence occurred, also throwing discredit on the entire US democratic system [4]. Such phenomena occurred in Brazil in the passage of deliveries between Bolsonaro and Lula which seemed to be inspired to the analogue between Trump and Biden.…”