Sustainable development goals and digitalisation: A systematic literature review and empirical evidence

Abstract

This thesis examines the impact of digitalisation, Foreign Direct Investment (FDI) and environmental taxation on attaining social and environmental-focused Sustainable Development Goals (SDGs). Specifically, the thesis consists of a Systematic Literature Review (SLR), bibliometric analysis, and two empirical essays. The first essay aims to determine whether the generated income from cryptocurrency trading can help attain environmental and energy SDGs, namely SDG 7 (affordable and clean energy) and SDG 13 (climate action)1. The methodology used the Scopus database based on 574 papers reviewed under five clusters. Co-citation and co-occurrence analysis show a growing interest in cryptocurrencies, SDGs 7 and 13. There is also an ongoing debate about the carbon emission and energy consumption of cryptocurrency mining versus the economic policies and implications. The findings expand the sustainability and digitalisation literature. They also influence policymakers and central banks towards changes in financial markets and socioeconomic policies, leading to the attainment of SDGs in the future. Essay one conducts an SLR and bibliometric analysis based on a sample of 574 publications. It investigates the trends in the literature about environmental and energy goals: SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). Additionally, it focuses on how these goals are linked to cryptocurrency literature. Other themes about the country’s economic classification, financial reporting, and theoretical background are covered. The methodology is based on reviewing 574 papers retried from Scopus. The papers have been clustered based on geographical location, authors and themes. The results show a direction in academic research to investigate the linkage between ecological, energy and cryptocurrencies as a digitalisation trend, with considerable limitations in finding adequate empirical evidence. Accordingly, the second and third essays respond to future research directions to provide empirical evidence on how cryptocurrency impacts the environmental SDGs. In essay two, the effect of Bitcoin trading volume on averting environmental catastrophes that the United Nations (UN) addresses by SDGs 6 (Water And Sanitation) and 13 (Climate Action) are examined. By enabling water management networks, smart contracts, and cryptocurrency as a payment system, the wealth created by Bitcoin trading significantly and positively impacts SDG 6, according to an examination of cross-sectional data from 32 countries (256 observations) from 2013 to 2020. However, the increased trading volume still hinders SDG 13’s fulfilment by raising carbon emissions. The analysis concentrates on gold reserves and stock trading volume to provide a thorough picture. With no discrepancies in bitcoin trading volumes, it demonstrates a considerable disparity between the developed and emerging markets concerning the SDGs’ state and governance levels. Based on the results, it is recommended that more empirical evidence is required to understand how digital currencies, including Bitcoin, can impact environmental sustainability and the United Nations Agenda. Essay three aims to investigate the impact of Foreign Direct Investment (FDI) and environmental tax on the progress of three socially focused Sustainable Development Goals (SDGs): SDG 1 (No Poverty), SDG 3 (Good Health And Well- Being) and SDG 5 (Gender Equality)2. Moreover, it aims to analyse the moderating role of Financial Technology (FinTech). Among the seven social SDGs, SDGs 1, 3 and 5 are selected based on the results of a relative importance test using a boosted regression tree (BRT) algorithm as an advanced machine learning technique. The loose coupling theory theoretically backs the research by illustrating the dynamic of the spillover effect. The sample of this international study included 70 countries over ten years from 2011 to 2020, during which FinTech emerged. Based on the Ordinary Least Square results, both FDI and environmental tax were found to significantly and positively impact the progress of the three investigated SDGs, while FinTech moderates the impact on SDGs 1 and 3. This study has implications for policymakers. Also, it helps to reduce the gap in accounting and sustainability literature by questioning the debates on FDI, green taxation policies and the future of sustainability. This thesis systematically, theoretically, and empirically contributes to the social and environmental accounting literature based on a profound theoretical framework and scholarly literature that integrate perspectives from institutions and UN officials. It also outlines consequences for investors, practitioners, policymakers, and regulators. Notably, this study shows that due to the voluntary character of the SDGs and the lack of adequate legal protection, governments are not reacting to them appropriately. Nevertheless, people are now less conservative about investing in cryptocurrencies and less hesitant about digital payments or global investors. However, they are more ecologically aware. Therefore, closer attention is essential in academic research to ensure countries’ economic strategies go hand in hand with targeting SDGs by 2030.