Skip to content
Open access

How Governance Relates to Sustainability Across Economic, Social, and Environmental Domains: Evidence from Interpretable Machine Learning

Aug 2026 · Sustainability · 0 citations · 56 references

Abstract

Sustainable development is multidimensional, yet governance is often examined through aggregate SDG performance, leaving limited understanding of whether different governance dimensions are equally salient across economic, social, and environmental domains. This study investigates domain-specific governance salience using cross-national data from 2015 to 2024. Governance is measured through the Worldwide Governance Indicators, while sustainability performance is modeled through the overall SDG index and three domain-specific indices covering economic, social, and environmental sustainability. Tree-based machine learning and SHAP analysis are used to compare the relative importance of governance indicators and socioeconomic control variables. The findings reveal a domain-sensitive governance pattern that is obscured by aggregate SDG performance. Governance indicators are secondary in the overall SDG model but become more salient in the economic dimension, especially through Government Effectiveness, Rule of Law, and Regulatory Quality. In the social dimension, governance retains moderate relevance alongside health and development-related conditions. By contrast, the environmental domain exhibits limited predictability, highlighting an important boundary condition in the role of governance. Further analysis of high-income countries reveals that specific governance dimensions exhibit greater predictive relevance, although the overall governance pattern remains less consistent. These findings provide support for a metagovernance-informed perspective, showing that the relevance of governance for sustainable development differs across sustainability domains.

Read PDF

Similar papers

Aug 2026

Exploring the Moderating Role of Country Governance in the Relationship Between Sustainable Performance and Firm Performance: Empirical Evidence From an Emerging Market

Sustainable development is increasingly reshaping corporate strategies, particularly in emerging markets such as India, where environmental, social, and governance (ESG) integration has become pivotal for long‐term value creation. This study examines the impact of ESG performance on firm outcomes for Nifty 500 firms...

Rizwana Khurshid, A. Islam · 0 citations
Open access Aug 2026

The Effects of Governance Quality and Policy Framework on Sustainable Business Performance in Nigeria

This study investigates the effects of governance quality and regulatory quality on sustainable business performance among publicly listed firms in Nigeria. Grounded in Institutional Theory, Stakeholder Theory, and the Triple Bottom Line (TBL) framework , the study examines how institutional quality influences firms' e...

U. Abbo · 0 citations
Open access 2026

Cross-Domain Variability in Governance Systems: A Comparative Analysis of Governance Capability Across Critical Sectors

Governance systems across sectors exhibit significant variability in their ability to integrate artificial intelligence, real-time monitoring, and adaptive oversight. While some sectors demonstrate advanced governance maturity—characterized by continuous sensing, predictive analytics, and event-validated learning—other...

Dr. Robb Shawe · 0 citations
Jul 2026

Sustainability, Value Chain and Political Regime: Implications on Firm Performance

Global supply chains face increasing sustainability‐related risks, yet evidence regarding the financial benefits of environmental, social, and governance (ESG) initiatives remains mixed. We argue that these inconsistencies arise because ESG dimensions operate through different value‐creation mechanisms and because ex...

S. Bhatnagar, R. Kumar · 0 citations
Open access Jul 2026

Environmental, Social, and Governance and Systematic Risk Across Institutional Contexts: Evidence from Europe and MENA

This study examines the relationship between environmental, social, and governance performance and systematic risk, measured by equity beta, across firms operating in different institutional environments. Using a cross-sectional dataset of 2,683 publicly listed firms from Europe and the Middle East and North Africa, th...

Viviane Naimy, W. P. Chiou · 0 citations
Open access Jul 2026

Environmental, social, and governance performance and firm performance in Thailand: The moderating role of governance

This study investigates how Environmental, Social, and Governance (ESG) performance related to corporate performance among firms listed on Thailand Sustainability Investment (THSI) index from 2018 to 2022, that are part of the Stock Exchange of Thailand (SET). This research utilizes agency theory and stakeholder theory...

Pakkamon Charoensuk, Chaimongkol Pholkaew, Kusuma Dampitakse · 0 citations

We use cookies to run the site and, with your consent, for analytics and to show ads. See our Cookie Policy.