The Impact of Financial Development on Sustainable Development: Empirical Evidence From Asia-Pacific Countries

Abstract

This research examines the influence of financial development on sustainable growth in 16 Asia-Pacific countries from 2000 to 2022. Employing advanced econometric techniques, such as multiple fixed effects and quantile regression, the research demonstrates a positive linkage between financial development and sustainability outcomes. Investments in education, research and development (R&D), and government expenditure are also identified as key contributors promoting sustainable development. Robust tests and quantile regression are performed to further validate these results. Empirical results indicate that financial development exerts a more pronounced effect in countries with lower SDG scores. The findings suggest tailored policy recommendations, highlighting the need to balance short- and long-term financing strategies, encourage environmentally focused financing, and strengthen financial literacy initiatives to foster sustainable development.