Club Convergence in Corporate Environmental Protection and Resource Management Expenditure for Sustainable Development: Evidence from Indian States

This article examines the club convergence of corporate environmental protection and resource management (CEPRM) expenditure across a panel of 26 Indian states from 2014–2015 to 2020–2021 using the novel Phillips–Sul (PS) (2007) approach. The results of a single steady-state analysis reveal divergence in CEPRM expenditure and indicate that states are not converging towards a single steady-state path. Meanwhile, the PS approach reveals heterogeneity among states and confirms the formation of three clubs. Each club follows a distinct steady-state path, and the estimated convergence speeds differ across groups: Club 1 has a slower rate (0.112) than Club 3, which has a faster rate (2.609), confirming the conventional convergence approach. By identifying multiple convergence paths, this analysis provides insight into CEPRM disparities and reveals uneven environmental stewardship by the corporate sector across Indian states. As a result, the findings suggest that policymakers should design tailored policies for each club to address issues related to CEPRM expenditure, thereby supporting a more balanced distribution of environmental spending across Indian states. JEL Codes: Q580, M14, C33