Green Financing and Sustainable Entrepreneurship: A Comparative Analysis of Developed and Developing Economies through Key Sustainability Indicators

Abstract

As economies worldwide confront the urgent need to transition toward low-carbon and socially inclusive development models, the interaction between green finance, sustainable entrepreneurship, and innovation ecosystems has become central to both academic debate and policy agendas. This article investigates how these dimensions jointly shape national trajectories across 30 developed and developing countries by combining key sustainability indicators, including the Green Growth Index, Global Green Finance Index, Global Innovation Index, ESG scores, and the number of unicorns. Using Principal Component Analysis (PCA), the study identifies two main latent dimensions integrated sustainability and technological dynamism and reveals a typology of sustainability-driven, tech-driven, and lagging economies. Countries such as Switzerland and Sweden demonstrate a strong convergence between ESG performance, green growth, and innovation capacity, whereas others, including the United States, India, and Kenya, exhibit more fragmented patterns. The findings highlight the critical mediating role of institutional quality in translating green financial flows and innovative potential into sustainable entrepreneurial outcomes. For policymakers, the results offer a comparative diagnostic tool to prioritise interventions in green finance infrastructure, ESG regulation, and ecosystem support, and to design more inclusive regional cooperation frameworks. The study also points to avenues for future research, including the integration of blue economy indicators and subnational data, as well as the use of causal modelling approaches, to further inform evidence-based strategies for sustainable and resilient development.

 Keywords: finance; sustainable entrepreneurship; ESG; innovation; green and blue economy; Principal   Component Analysis (PCA)