Assessing the relationship between sustainability and regional competitiveness in the Brazilian context

Abstract

Sustainability has become a central priority in regional development agendas, yet its relationship with regional competitiveness remains insufficiently understood at the municipal level, particularly in emerging economies. This study examines how sustainability attributes are associated with regional competitiveness across Brazilian municipalities. Using indicators derived from the Sustainable Development Goals (SDGs), sustainability is operationalized through latent dimensions and analyzed alongside competitiveness dimensions – institutions, society, and economy – using multiple linear regression and canonical correlation analyses. The empirical results identify three sustainability dimensions: (i) economic and institutional factors, (ii) resources and ecosystems, and (iii) socio-environmental conditions. The findings indicate that sustainability attributes are systematically associated with regional competitiveness. In particular, the economic and institutional dimension and the resources and ecosystem dimension show the strongest positive associations with competitiveness indicators, suggesting that institutional capacity and sustainable resource governance are key drivers of regional performance. The socio-environmental dimension also contributes to competitiveness, although its influence appears more limited. Evidence regarding territorial covariates – such as location in wealthier regions and participation in regional agglomerations – remains mixed, highlighting that structural conditions alone do not fully explain competitiveness outcomes. These results underscore the importance of considering the interaction between agency – expressed through institutional capacity and policy choices – and structural territorial contexts. From a public policy perspective, the findings highlight the need for integrated strategies that strengthen institutions, promote sustainable resource management, and leverage local capabilities to enhance sustainable regional competitiveness.