The Causal Relationship Between ESG and Economic Growth: Evidence from the Panel of Commonwealth Independent States

This paper analyzes the causal relationship between ESG and economic growth for CIS member states over the sample period 1996–2020. Since the results of the varied panel stationarity tests suggest mixed findings on the order of integration, the ARDL model is employed to determine the co-integration relation among the series. The result of the VEC model, which is estimated to explore the long-run and short-run dynamics of this casual relation between the series in a basic way, suggests that there is a causal relationship running from income level to ESG criteria. This implies that the adaptation of macroeconomic policies which will stimulate the economic growth process in CIS countries may also encourage the ESG indicator levels of the economy.