Profound Impact of Economic Openness and Digital Economy towards a Sustainable Development: A New Look at RCEP Economies

Sustainable development has become a serious challenge for the globe. Therefore, globalization and the digital economy are considered crucial factors for sustainable development (SD). The current study tries to estimate the link between trade openness and information and communication technology (ICT) with sustainable growth via a linear function in which economic growth, urbanization, and human capital are taken as independent variables. The study employs the Interactive Fixed Effect (IFE) and Dynamic Common Correlated Effect (D-CCE) to quantify the long-term association among variables in a multiplicative framework. The obtained outcomes show a significant contribution of globalization and the digital economy to sustainable growth. Likewise, economic growth and human capital cause a decline in sustainable growth. Moreover, the empirical outcomes show the discouraging role of urbanization in sustainable development. Additionally, a bi-directional association exists between sustainable development and trade openness and economic growth, trade openness and economic growth, urbanization and human capital, and economic growth and urbanization. Such findings further strengthen policymakers’ belief in other nations to promote sustainable development. Moreover, to alleviate the economic growth losses, we suggest setting up a sustainable development sharing mechanism among regions.