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Countering geopolitical risk: The synergy of climate finance and financial access for entrepreneurship

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  • Hanif, Muhammad Wasif
  • Li, Yi
  • Afridi, Muhammad Asim
  • Akhtar, Tahir

Abstract

This study examines whether geopolitical risk (GPR) influences entrepreneurship in low- and middle-income countries (LMIC) and whether climate finance and financial access can mitigate its adverse effects. Using panel data from 14 LMICs (2007–2022) and employing dynamic GMM estimations, results show that GPR significantly reduces entrepreneurship, while climate finance positively influences it but does not independently offset GPR's impact. However, climate finance in the presence of financial access effectively buffers against geopolitical shocks. The results highlight the need for integrated policies that combine political stability, targeted climate finance, and strengthened financial systems.

Suggested Citation

  • Hanif, Muhammad Wasif & Li, Yi & Afridi, Muhammad Asim & Akhtar, Tahir, 2025. "Countering geopolitical risk: The synergy of climate finance and financial access for entrepreneurship," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018495
    DOI: 10.1016/j.frl.2025.108595
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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