The Impact of Corporate Sustainable Development Goals Adoption on Corporate Investment: International Evidence

This study investigates the relationship between sustainable development goal (SDG) engagement and corporate capital expenditures using 37,098 firm‐year observations from 6243 firms across 90 countries from 2016 to 2024. Grounded in stakeholder theory and the resource‐based view, we develop and test hypotheses regarding how sustainability commitments influence corporate investment decisions. We operationalize SDG engagement through complementary measures: a PCA‐based index capturing sustainability intensity and an average SDG score representing breadth of adoption. Using a two‐way high‐dimensional fixed‐effects regression approach, we find that both measures are positively and significantly associated with capital expenditure intensity. The governance pillar of SDGs has the strongest impact on capital expenditures, followed by environmental and social factors. These findings remain robust across different model specifications, endogeneity adjustments, and sample stratifications. Our study contributes to the literature by providing empirical evidence on the SDG‐investment nexus and offers insights for regulators, investors, and companies managing sustainability transitions.