Macroenvironmental Drivers of Poverty in Developing Countries: Rethinking the Globalization–Sustainable Development Nexus

ABSTRACT The study addresses the critical problem of examining the macroenvironmental drivers of poverty in developing countries, focusing on how social, economic, political, and technological factors moderate globalization's impact on poverty outcomes. Using unbalanced panel data from 25 developing countries across Africa, Asia, Europe, North America, and South America from 2000 to 2021, we employ fixed‐effects generalized least squares (FE‐GLS) and system generalized method of moments (GMM) estimators to analyze the globalization–poverty nexus. The model incorporates religious freedom, geopolitical tension, economic policy uncertainty, and digitalization as moderating factors. The results indicate that while globalization broadly reduces poverty, its impact is conditional on the macroenvironment. Economic policy uncertainty positively and significantly moderates the relationship, indicating that globalization may exacerbate poverty during intensified policy volatility. Similarly, the moderating effect of internet use is positive and significant, revealing a digital divide where unequal access to digitalization heightens vulnerability among the poor. Other macroenvironmental factors, religious freedom, geopolitical tension, and fixed broadband subscription also exert positive but statistically insignificant influence on the globalization–poverty nexus. Furthermore, our results indicate that economic growth significantly reduces the poverty gap but not the headcount ratio, highlighting that growth alone is insufficient for lifting households above the poverty line, especially with the prevalence of the poverty trap. The result further underscores the importance of human capital in enabling individuals to harness globalization benefits. Overall, the study highlights that macroenvironmental conditions shape how globalization influences poverty and offers actionable policy insights for sustainable and inclusive development in developing countries.