The Critical Role of Investment Banks in the Sustainable Growth of Emerging Economies: the Case of Georgia

Achieving sustainable economic growth is a major challenge for developing countries. This study aims to assess the role of investment banks in this process, using Georgia as a case study. We hypothesize that sustainable growth requires not only a commercial banking system but also the presence of fully-fledged investment banks that can act as catalysts for structural change. The research is based on literature analysis, an assessment of Georgia's macroeconomic data, and a study of the operations of financial institutions. The theoretical section integrates classical theories of financial intermediation with modern concepts of sustainable finance and ESG (Environmental, Social, Governance) standards. The results show that in Georgia, where the financial sector is based on commercial banks, a fully-fledged investment banking institution is absent. The investment divisions of commercial banks primarily deal with simple securities and do not perform complex functions such as organizing major infrastructure projects, corporate merger transactions, or financing innovative projects. The main reasons for this are: a weak capital market, a lack of specialists, the absence of regulations tailored for investment banking, and a business model dependent on short-term deposits. Conclusion. Achieving sustainable growth requires the establishment of fully-fledged, independent investment banks. This necessitates: introducing specific regulations, deepening the capital market, training personnel, and attracting long-term capital sources. Only under these conditions will Georgia be able to fully utilize the potential of financial innovation for sustainable development.