Simplice A. Asongu, Thierry Pondie-Messie, Fabrice Ewolo Bitoto
This paper analyzes the impact of alternative financing (i.e., green finance, remittances and foreign aid) on sustainable development in Africa. It is based on a panel of 47 African countries from 1990 to 2021. Using the Sustainable Development Index (SDI) developed by Hickel, the study evaluates the influence of three primary sources of alternative financing: migrant remittances, green finance (as measured by investments in renewable energy), and official development assistance (ODA). The methodology is based on Tobit and instrumental variables (IV)-two-stage least squares (2SLS) models, adapted for endogeneity resolution. The results show that remittances positively and significantly impact sustainable development, especially in middle-income countries. However, green finance and ODA negatively impact sustainable development overall. Analysis by income group shows that green finance benefits low-income countries more and that ODA is more effective in high-income countries. Additionally, the study emphasizes the catalytic role of financial innovations, particularly mobile money, in amplifying the effects of alternative financing on the SDI. These results underscore the importance of strengthening institutional frameworks, governing financial resources more effectively, and implementing appropriate public policies. Furthermore, it is relevant to provide easier access to digital services and encourage the use of innovative methods to mobilize diaspora resources. Other policy implications are discussed.
{"title":"What Role Can Alternative Finance Play in Africa's Sustainable Development Trajectories?","authors":"Simplice A. Asongu, Thierry Pondie-Messie, Fabrice Ewolo Bitoto","doi":"10.1002/bsd2.70217","DOIUrl":"https://doi.org/10.1002/bsd2.70217","url":null,"abstract":"<p>This paper analyzes the impact of alternative financing (i.e., green finance, remittances and foreign aid) on sustainable development in Africa. It is based on a panel of 47 African countries from 1990 to 2021. Using the Sustainable Development Index (SDI) developed by Hickel, the study evaluates the influence of three primary sources of alternative financing: migrant remittances, green finance (as measured by investments in renewable energy), and official development assistance (ODA). The methodology is based on Tobit and instrumental variables (IV)-two-stage least squares (2SLS) models, adapted for endogeneity resolution. The results show that remittances positively and significantly impact sustainable development, especially in middle-income countries. However, green finance and ODA negatively impact sustainable development overall. Analysis by income group shows that green finance benefits low-income countries more and that ODA is more effective in high-income countries. Additionally, the study emphasizes the catalytic role of financial innovations, particularly mobile money, in amplifying the effects of alternative financing on the SDI. These results underscore the importance of strengthening institutional frameworks, governing financial resources more effectively, and implementing appropriate public policies. Furthermore, it is relevant to provide easier access to digital services and encourage the use of innovative methods to mobilize diaspora resources. Other policy implications are discussed.</p>","PeriodicalId":36531,"journal":{"name":"Business Strategy and Development","volume":"8 3","pages":""},"PeriodicalIF":4.2,"publicationDate":"2025-09-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1002/bsd2.70217","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145102084","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Marta Guterres, Denize Demarche Minatti Ferreira, Moacir Manoel Rodrigues Junior
This paper aims to investigate the effect of Environmental, Social, and Governance (ESG) variables on business financial performance and their influence on operational and investment decisions. The financial performance of Latin American corporations from 2019 to 2022 was quantitatively analyzed using secondary data from Refinitiv. The analysis conducted through Partial Least Squares Structural Equation Modeling (PLS-SEM) revealed a positive effect of environmental factors on profitability, while social factors notably have a negative effect on asset utilization. However, there was no observable impact of governance characteristics on financial performance. These findings suggest that while social issues may hinder operational efficiency, proactive and sustainable corporate practices aimed at addressing environmental challenges can enhance company profitability. Suggestions include adopting comprehensive ESG governance, implementing successful CSR initiatives, and making sustainable investments in environmental policies. A comprehensive understanding of the relationship between ESG factors and financial performance, which seeks to promote both financial success and positive societal and environmental outcomes, necessitates further in-depth contextual study.
{"title":"Maximizing Financial Performance Through ESG Excellence and Sustainable Practices","authors":"Marta Guterres, Denize Demarche Minatti Ferreira, Moacir Manoel Rodrigues Junior","doi":"10.1002/bsd2.70218","DOIUrl":"https://doi.org/10.1002/bsd2.70218","url":null,"abstract":"<p>This paper aims to investigate the effect of Environmental, Social, and Governance (ESG) variables on business financial performance and their influence on operational and investment decisions. The financial performance of Latin American corporations from 2019 to 2022 was quantitatively analyzed using secondary data from Refinitiv. The analysis conducted through Partial Least Squares Structural Equation Modeling (PLS-SEM) revealed a positive effect of environmental factors on profitability, while social factors notably have a negative effect on asset utilization. However, there was no observable impact of governance characteristics on financial performance. These findings suggest that while social issues may hinder operational efficiency, proactive and sustainable corporate practices aimed at addressing environmental challenges can enhance company profitability. Suggestions include adopting comprehensive ESG governance, implementing successful CSR initiatives, and making sustainable investments in environmental policies. A comprehensive understanding of the relationship between ESG factors and financial performance, which seeks to promote both financial success and positive societal and environmental outcomes, necessitates further in-depth contextual study.</p>","PeriodicalId":36531,"journal":{"name":"Business Strategy and Development","volume":"8 3","pages":""},"PeriodicalIF":4.2,"publicationDate":"2025-09-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1002/bsd2.70218","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145102085","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}