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Financial inclusion and environmental sustainability

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  • Ozili, Peterson K

Abstract

This paper analyses the association between financial inclusion and environmental sustainability. The study uses Pearson correlation analysis to analyse the association between financial inclusion and environmental sustainability. The level of financial inclusion was measured using two supply-side financial inclusion indicators: the number of ATMs per 100,000 adults and the number of commercial bank branches per 100,000 adults. Environmental sustainability was measured using two indicators: the environmental policy stringency index and the environmentally adjusted multifactor productivity growth index. The study finds that financial inclusion is positively correlated with environmental sustainability particularly in non-EU countries. The result implies that financial inclusion programs and efforts in non-EU countries complement environmental sustainability efforts toward achieving the United Nations sustainable development goals (SDGs). The findings also reveal a significant and negative association between environmental policy stringency and environmentally adjusted multifactor productivity growth particularly in EU member-countries and European countries, implying that strict environmental protection policies may harm green growth in EU and European countries.

Suggested Citation

  • Ozili, Peterson K, 2023. "Financial inclusion and environmental sustainability," MPRA Paper 116586, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116586
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    References listed on IDEAS

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    1. Silvia Albrizio & Tomasz Koźluk & Vera Zipperer, 2014. "Empirical Evidence on the Effects of Environmental Policy Stringency on Productivity Growth," OECD Economics Department Working Papers 1179, OECD Publishing.
    2. Nick Johnstone & Ivan Haščič & Julie Poirier & Marion Hemar & Christian Michel, 2012. "Environmental policy stringency and technological innovation: evidence from survey data and patent counts," Applied Economics, Taylor & Francis Journals, vol. 44(17), pages 2157-2170, June.
    3. Galeotti, Marzio & Salini, Silvia & Verdolini, Elena, 2020. "Measuring environmental policy stringency: Approaches, validity, and impact on environmental innovation and energy efficiency," Energy Policy, Elsevier, vol. 136(C).
    4. Faizul Haque & Collins G Ntim, 2018. "Environmental Policy, Sustainable Development, Governance Mechanisms and Environmental Performance," Business Strategy and the Environment, Wiley Blackwell, vol. 27(3), pages 415-435, March.
    5. Michael Chibba, 2009. "Financial Inclusion, Poverty Reduction and the Millennium Development Goals," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 21(2), pages 213-230, April.
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • 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

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