The Role of Political Stability in the Context of ESG Models at World Level

Abstract

In this article, we estimate the role of Political Stability and Absence of Violence and Terrorism-PS in the context of Environmental, Social and Governance-ESG data at world level. We analyse data from 193 countries in the period 2011-2020. We apply Panel Data with Fixed Effects, Panel Data with Random Effects and Pooled Ordinary Least Square-OLS. We found that PS is positively associated, among others, to Population Density and Government Effectiveness, and negatively associated, among others, to Research and Development Expenditure and Maximum 5-day Rainfall. Furthermore, we apply the k-Means algorithm optimized with the application of the Elbow Method and we find the presence of four clusters. Finally, we propose a confrontation among eight different machine-learning algorithms for the prediction of PS and we find that the Polynomial Regression shows the higher performance. The Polynomial Regression predicts an increase in the level of PS of 0.25% on average for the analysed countries.

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 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.…”