Heterogeneous Effects of Government Investment on SDG 9: Evidence From a Quantile Approach Across Development Levels

ABSTRACT This study investigates the relationship between government investment and Sustainable Development Goal 9 (SDG 9) performance, focusing on the distribution of SDG 9 performance. The study uses annual data from 70 countries, comprising 41 developing and 29 developed economies, over the period 2000–2019. It employs methods such as Fixed Effects (Driscoll and Kraay, 1998), Augmented Mean Group (AMG), and Method of Moments Quantile Regression (MMQR). The findings show that the impact of government investment varies significantly across both development levels and SDG 9 quantiles. In developing countries, the positive effect of government investment is concentrated only at the upper quantiles, whereas in developed countries, it is concentrated at the lower‐to‐middle quantiles. However, trade openness shows a positive relationship with SDG 9 performance in all countries. Environmental taxes, on the other hand, emerge as a significant driver of sustainability only in developed countries. Overall, the findings suggest that the effectiveness of government investment in achieving Sustainable Development Goal 9 depends on countries' absorption capacity, their current SDG 9 performance levels, and the pace of expansion of government investment.