Green Finance and Inequality
Posted: 24 Mar 2023
Date Written: March 17, 2023
This paper provides empirical evidence for a significant positive association between green finance and top income inequality from a broad panel of countries. This relationship is strongest for countries with low GDP and low levels of financial development. Moreover, we find evidence for a significant positive long term effect on inequality that persists for more than five years. We argue that the association between green finance and inequality is at least partially driven by an innovation mechanism. Using a moderated mediation setup, we show that innovation is mediating the positive relationship between green finance and top income inequality.
Keywords: green finance, inequality, innovation
JEL Classification: G10, D62, D63, O16, O31, O33
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