Determinants of sustainable development: Evidence from 12 Asian countries

This study examines the factors that determine sustainable development, measured by adjusted net saving, using panel data for 12 Asian countries for the 1990-2014 period. A panel data model is estimated using both random-effect and fixed-effect approaches. The Hausman test points to the superiority of the random-effect model over the fixed-effect model, which is apparent when the results of the two estimations are compared. The results of the random-effect estimation show a more significant and better overall fit. These results indicate a positive and significant effect of per capita income and financial development on sustainable development and a negative and significant effect of the inflation rate, natural resource rent, and time. The results suggest that maintaining a proper natural resource balance is necessary for sustainable development.