Green Supply Chain Finance and Systemic Risks in the Global South's Green Transition: An Approach Towards SDG 9

Abstract

This study examines how green supply chain finance relates to systemic risks, including competitiveness risk, financial instability risk, and green transition‐related geopolitical exposure, across 15 Global South economies from 2014 to 2024. Extending prior firm‐level research, this study conceptualizes green supply chain finance as a macro‐level financial mechanism linking industrial transformation to systemic stability. A composite index of green supply chain finance is constructed using green financing and policy indicators, and panel fixed‐effects models are complemented by heteroskedasticity‐based instrumental variable estimation to address endogeneity. The results show that green supply chain finance is consistently associated with lower competitiveness risks and exhibits weaker but generally negative associations with financial instability and transition‐related external risks. Overall, the findings extend the green finance literature by providing cross‐country evidence on the relationship between green supply chain finance and systemic resilience, with implications for sustainable industrial development and the broader objectives of Sustainable Development Goal 9.