Green Finance, Governance, and Sustainable Competitiveness: Policy Pathways for Carbon Mitigation
Feifei Chen, Qiusu Wang, Jamal Shah
Keywords:
Green Finance; Institutional Quality; Carbon Emissions; Sustainable Competitiveness; Trade
Abstract:
Green finance is increasingly seen as an important tool for reducing carbon emissions and supporting sustainable development. However, a critical gap persists in understanding the collective effects of green finance and governance on carbon mitigation, which is important for effective policy design. Therefore, this study investigates the interaction effect of green finance and governance quality on carbon emissions across OECD economies from 2000 to 2022. Using the method of moments quantile regression, the results show that countries investing more in green finance reduce carbon emissions across quantiles. Furthermore, the interaction between green finance and institutional quality is inversely related to carbon emissions at higher quantiles. The empirical results further indicate that GDP and imports contribute to increasing carbon emissions, whereas exports negatively affect emissions. These findings highlight strategic pathways for policymakers and regulators. To enhance sustainable competitiveness, it is crucial to combine the expansion of green finance with comprehensive institutional reforms, thus facilitating more effective progress toward global climate objectives.
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 10.7441/joc.2026.SI.23
Chen, F., Wang, Q., & Shah, J. (2026). Green Finance, Governance, and Sustainable Competitiveness: Policy Pathways for Carbon Mitigation. Journal of Competitiveness, 18(SI 2), 295–314. https://doi.org/10.7441/joc.2026.SI.23
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