Publication Details
Abstract
Modern economies have made sustainable economic development one of their primary objectives and economic growth can only be achieved by proper usage of financial investments and real investments to improve the productivity, resilience, and long term growth. Although the increase in the volume of investments has always been associated with the growth of the economy, recent research indicates that the effectiveness, sectoral structure, and institutional environment of investments are the key factors to their developmental effect. Although there is much literature on the investment-growth nexus, there is scanty literature on the effect of interaction of investment efficiency and institutional quality in affecting sustainable economic growth, especially on economies whose investment levels are similar yet they have varying results. This paper explores how efficient use of investments can facilitate sustainable growth of the economy with particular focus on sectoral emphasis and governance. Through empirical studies, it has been found that investment that is geared towards high productivity sectors and that is backed by strong institutional frameworks greatly boosts economic stability, resilience and growth in the long-run, far surpassing the impacts of simple investment volume. The research combines the quantitative econometric analysis with the institutional and sectoral evaluation to get into the complete framework of investment efficiency and sustainable development to fill the gap in the future studies. Results provide evidence-based recommendations to policymakers in order to maximize investment policies, increase institutional capabilities, and achieve sustainable and inclusive development, and the necessity of more micro-level examinations and improved governance indicators in the future.