Economic globalization and firms’ financial flexibility: the role of SDG engagement

This study investigates the relationship between economic globalization (EG) and firms’ financial flexibility (FF), with particular attention to the moderating role of firms’ engagement with Sustainable Development Goals (SDGs). Using a panel of 7,075 firm-year observations from 24 emerging economies over the period 2011–2023, we find that greater EG is positively associated with firms’ FF. We further show that this relationship is conditioned by firms’ engagement with the United Nations SDGs. Specifically, the positive association between EG and FF is significantly stronger for firms with higher SDG engagement. These results provide firm evidence of the financial implications of EG in emerging markets and highlight sustainability engagement as an important channel through which firms enhance FF in a globalized economic environment.