Lea Felicitas Tschan, University of St. Gallen

"Green Investments and Top Income Inequality"

Abstract

This paper provides empirical evidence for a significant positive association between green investments and top income inequality from a panel of 87 countries from 2004 to 2020. This relationship is strongest for countries with initially lower levels of income, financial development, and carbon emissions. The positive effect of green investments on inequality persists for four years and thereafter abates. We argue that the association between green investments and inequality is at least partially driven by technological change. Using a moderated mediation design, we show that green innovation is mediating the relationship between green investments and top income inequality.

Contact person: Frikk Nesje