How sustainable banking fosters the SDG 10 in weak institutional environments

Fernando Úbeda, Francisco Forcadell, Elisa Aracil and Alvaro Mendez ()

Journal of Business Research, 2022, vol. 146, issue C, 277-287

Abstract: The role of the financial sector is central in reducing income inequality – the goal of SDG 10 – by facilitating economic opportunities. However, institutional weaknesses may also undermine this effect. We argue that sustainable banking generates bidirectional trust to overcome institutional weaknesses, particularly the weak rule of law. Empirical evidence from 46 countries aggregating data of 1060 banks over 2010–2017 shows that sustainable banking lessens income inequality in weak rule of law settings. The results are robust after including the effects of bank digitalisation. This study has important implications for sustainable banking expansion into weak institutional environments and demonstrates banks’ efforts in their commitment to reducing inequality.

Keywords: Sustainable Development Goals; Inequality; Institutions; Rule of law; Banks; ESG (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (8)

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Working Paper: How sustainable banking fosters the SDG 10 in weak institutional environments (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:146:y:2022:i:c:p:277-287

DOI: 10.1016/j.jbusres.2022.03.065

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