Research on the relationship between economic indicators, financial indicators, and production factors towards sustainable development

Abstract

This article aims to research the relationship between economic, financial indicators, and production factors on the amount of CO₂ emissions, aiming towards policies for sustainable economic development while still protecting the environment. The research collects data from 36 countries from the OECD (Organisation for Economic Co-operation and Development) organization and 02 developing countries from 2009 to 2020 with 456 observation data lines. The research results indicate that tax (TAX) positively impacts CO₂ at 1.059 at the same time, debt-to-equity ratio (DEPT) has a positive impact at 0.165 and Gross Domestic Product (GDP) impacts the amount of CO₂ emissions at 0.109. Concurrently, the study also discovered that the Human Development Index (HDI), Market Capitalization (MARC), and Material footprint (MFC) do not impact CO₂.

Moreover, when studying the relationship of MFC with GDP, DEPT, MARC, HDI, and TAX, the research results show that TAX has an impact of 0.657. HDI has an effect of 0.149. Alongside this, the negative consequences of MARC are -0.072. And DEPT is -0.224 on MFC. These results show that tax policy, debt management, and the Human Development Index are essential to minimizing environmental impacts towards sustainable development.