ABSTRACT Achieving sustainable development at the firm level remains a major challenge in frontier economies characterized by financial constraints and structural vulnerabilities. This study investigates how financial resilience and economic vulnerability jointly influence sustainable development outcomes in women‐owned firms across frontier South Asian economies, using firm‐level data spanning 2010–2023 and covering approximately 6000 firms across five countries. To ensure robust inference, the study employs a multi‐method empirical strategy, including fixed effects (FE) estimation, interaction modeling, propensity score matching (PSM), and quantile regression (QR). The baseline models incorporate key control variables—firm size, age, export status, access to credit, and business constraints—to account for heterogeneity and isolate the net effects of resilience and vulnerability. The results show that financial resilience significantly enhances sustainable development outcomes, while economic vulnerability exerts a strong negative effect. Importantly, the interaction analysis reveals that financial resilience mitigates the adverse impact of vulnerability, indicating that financially stronger firms are better able to absorb shocks and sustain performance. The findings also highlight persistent gender disparities, with women‐owned firms exhibiting relatively lower outcomes due to structural constraints. Robustness analyses confirm these results. PSM estimates show that financially resilient firms outperform comparable counterparts, while QR results reveal heterogeneity, with resilience effects stronger at higher performance levels and vulnerability effects more binding at lower quantiles. Overall, the study provides early firm‐level evidence on the resilience–vulnerability nexus and offers policy insights for advancing SDG 5 and SDG 8 through improved financial inclusion and targeted support.
Alahmari et al. (Mon,) studied this question.