SDGs and economic resilience: Evidence from the COVID-19 shock

Since the adoption of the 2030 Agenda for Sustainable Development by all United Nations member states in 2015, nations have been striving to achieve sustainable development goals (SDGs) with varying degrees of progress. Sustainable development is likely to provide economic resilience by smoothing out the volatility of adverse shocks. Utilizing COVID-19 distress as an exogenous shock, we examine whether countries’ progress toward SDGs during the pre-COVID-19 period provided economic stability during the subsequent COVID-19 shock. However, we do not find such evidence using daily data of stock market volatility and confirmed COVID-19 cases over the first two years of the pandemic from 72 countries. On the contrary, our model demonstrates that cultural, openness and economic factors provided resilience during the shock. Our results challenge the progress made toward SDGs and provide important policy and academic implications.