The Impact of Environmental Social and Governance (ESG) Factors on Sustainable Economic Growth in Ghana: The Mediating Roles of Human Capital Development and Technological Innovation

Samuel Namoog; Zakaria Abubakari

doi:10.51867/ajernet.6.1.5

Authors

Samuel Namoog Department of Accounting and Finance, Bolgatanga Technical University, Bolgatanga, Upper East Region, Ghana
Zakaria Abubakari SD Dombo University of Business and Integrated Development Studies, Wa, Upper West Region, Ghana

DOI:

https://doi.org/10.51867/ajernet.6.1.5

Keywords:

Economic Growth, Human Capital Development, Governance, Sustainability, Technological Innovation

Abstract

With a focus on the mediating roles of technological innovation and human capital development, this study examines how environmental, social, and governance (ESG) sustainability variables affect long-term economic growth in Ghana. The study is guided by the Human Capital Theory. The World Development Indicators (WDI) is the source of the secondary data used. The study adopted quantitative research design using partial least squares structural equation modeling (PLS-SEM) in examining the relationships between technological innovation, human capital development, economic growth, and ESG variables. According to the analysis, governance factors significantly affect Ghana's economic growth, whereas social and environmental factors have little discernible direct influence. However, the study revealed that technological innovation and the human capital development serve as indirect drivers of economic growth, underscoring the importance of these mediating variables in the Ghanaian context. The government of Ghana is advised to create governance frameworks, promote the incorporation of ESG principles into corporate operations, and allocate funds for technological innovation, healthcare, and education. Enhancing governance frameworks, incorporating social and environmental considerations into economic plans, and creating an environment that supports technological innovation should be top priorities for policymakers. By highlighting the critical role that governance plays in the economic development of developing countries, this study adds to the body of literature, the impact of ESG sustainability on economic growth in Ghana with human capital development and technological development as mediating factors.

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