Politická ekonomie 2025, 73(2) Special Issue I:366-396 | DOI: 10.18267/j.polek.1457

Political Risk and Sustainable Development: Digitization and Environmental Policy Stringency

Chong Zhang ORCID...1,2, Menglu Zhang ORCID...3, Yunqiu Zhan ORCID...4, Jiale Yan ORCID...5
1 Chong Zhang, College of International Economics and Trade, Ningbo University of Finance and Economics, Ningbo, China
2 Ningbo Philosophy and Social Science Key Research Base "Research Base on Digital Economy Innovation and Linkage with Hub Free Trade Zones", Ningbo, China
3 School of Public Finance & Taxation, Guangdong University of Finance & Economics, Guangzhou, China
4 School of Marxism, Chengdu Technological University, Chengdu, China
5 College of Letters and Science, University of California, Berkeley, CA, USA

Emerging economies are consistently targeting advanced approaches to attain sustainable development while reducing their risk exposure and factors simultaneously. This research examines the influence of political risk, digitization and environmental policies, along with a set of economic and environmental factors, on the sustainable development of the BRICS economies. For the period from 1990 to 2020, the diagnostic tests confirmed a mixed order of integration. Therefore, the autoregressive distributed lag test is utilized and the results show that political risk, mineral resources and exports are harmful to sustainable development in the short run but significantly enhance sustainable development in the long run. On the other hand, environmental technologies are positively associated with sustainable development in the short run but transform into negative development in the long run. These diverse influences occur in the short and long run. The results indicate a consistent influence of digitization (positive) in both the short and long run. The long-run results are authenticated using panel fully modified ordinary least squares (FMOLS). Furthermore, the panel causality test validates diverse inferences regarding the causal association between the variables. Following the empirical outcomes, we recommend policies regarding equitable implementation of digital technologies, enhanced investment in environmental and green technologies, equitable resource management and a reduction in political risk, which could stimulate sustainable development.

Keywords: Political risk, sustainable development, digitization, policy stringency, ARDL, BRICS, mineral resources
JEL classification: F59, G38, O13

Received: March 29, 2024; Revised: August 13, 2024; Accepted: August 20, 2024; Prepublished online: November 25, 2024; Published: April 29, 2025  Show citation

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Zhang, C., Zhang, M., Zhan, Y., & Yan, J. (2025). Political Risk and Sustainable Development: Digitization and Environmental Policy Stringency. Politická ekonomie, 73(Spec.issue I.), 366-396. doi: 10.18267/j.polek.1457
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