ABSTRACT Climate change, political stability, and sustainability are three central factors that interact and serve as key drivers of achieving the Sustainable Development Goals (SDGs) in the MENA (Middle East and North Africa) region. Accordingly, this paper aims to fill a vital research gap by examining the impacts of climate change, natural resource rents, the world sentiment index, and political stability in influencing national ESG (environmental, social, and governance pillars) and EESG (economic and ESG pillars) in 14 MENA countries over the period 2000–2022. Using the method of moments quantile regression (MMQR), the findings reveal that temperature negatively affects both ESG and EESG, with a stronger effect in high‐income countries. This outcome is confirmed by the climate vulnerability index, which shows that climate change hinders ESG and EESG performance. Besides, the outcomes show that both natural resource rents and world sentiment index decrease ESG and EESG in the full sample. While political stability shows a positive effect in the full sample and high‐income sample, and a negative effect in high‐medium and low‐medium income samples. Moreover, political stability has demonstrated notable ability to mitigate the adverse effects of both climate change and natural resource rents. These findings remain robust using the panel quantile‐pooled mean‐group autoregressive distributed lag (PQPMG‐ARDL) model. Therefore, policymakers should develop integrated strategies that consider climate change and political stability to progress both ESG and EESG in the region.
Ayad et al. (Mon,) studied this question.
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