The paper begins by highlighting the detrimental effects of centuries of economic growth and mass production on natural resources and the environment, citing alarming statistics from sources such as NOAA and the Guardian regarding rising global temperatures and polar ice cap melting. It emphasizes the urgency of sustainable development goals and the concept of green growth, defined as economic growth with minimal environmental impact. A key challenge identified is the lack of capital for green projects, leading to the discussion of green finance as a mechanism to attract private investment. The role of social inclusion is also introduced, emphasizing its importance in achieving equality and justice. The paper then focuses on OECD countries due to their commitment to sustainable prosperity, the central role of green finance in their economies, and the ongoing discourse on social inclusion as a policy tool. The study's main objective is to assess the influence of green finance and social inclusion on the ecological prosperity of OECD economies. The authors preview their contributions: calculating a social inclusion index for OECD members, measuring inclusive green growth, and evaluating the interrelationship between green finance, social inclusion, and sustainable growth.

The literature review examines previous research on sustainable economic prosperity, green finance, and social inclusion. Studies are cited that highlight the multidimensional nature of sustainability, the complex interplay of factors influencing sustainable goals, and the importance of green innovation and renewable resources. Regarding green finance, the review notes research showing varying effectiveness across countries due to factors like financial development and regulation. Studies are also referenced that show the positive impact of green finance on attracting private capital and reducing CO2 emissions. Concerning social inclusion, the review presents diverse perspectives, including studies that suggest a potential alignment between social inclusion and greening the economy, and others that emphasize its necessity for achieving green prosperity by reducing poverty and income inequality. The review concludes by highlighting the gap in existing research on the combined effects of green finance and social inclusion on the sustainable growth of OECD member nations, which this study aims to fill.

The study uses a panel data approach focusing on 31 OECD countries from 2010 to 2021, resulting in 372 observations. The dependent variable is the inclusive green growth indicator (Jha et al., 2018), while explanatory variables include green finance market size and the social inclusion index (Hassan et al., 2022). Control variables incorporate green foreign direct investment (FDI), poverty rate, energy resource efficiency, and economic uncertainty. The methodology begins with testing for cross-sectional dependency using Pesaran's CD test. Following this, panel unit root tests (LLC and IPS) are employed to determine the order of integration of the variables. Then, Westerlund and Kao residual tests examine the presence of a long-run cointegration relationship. If cointegration is confirmed, the fully modified OLS (FMOLS) and dynamic OLS (DOLS) methods are used for estimation. Finally, the Dumitrescu-Hurlin (2012) test assesses causal linkages between dependent and explanatory variables.

The empirical findings, presented in Tables 2-8, show the following: Pesaran's CD test rejects cross-sectional independence; LLC and IPS tests show all series are stationary at I(1); Westerlund and Kao tests confirm a cointegration relationship; FMOLS estimations indicate a positive impact of green finance market size on green growth (a 1% increase in green finance leads to approximately a 0.019% increase in green growth). The social inclusion index, however, shows a statistically insignificant coefficient. Green FDI also shows a positive impact although not as significant as green finance. Poverty rate, energy resource efficiency and economic uncertainty show the expected negative and positive impacts respectively. DOLS estimations, used for robustness check, largely confirm the FMOLS results. Dumitrescu-Hurlin causality test reveals a homogeneous causality running from green finance to green growth, but not vice-versa.

The results indicate that in industry-based OECD economies, social factors do not significantly influence green growth. This contrasts with the significant positive effect of green finance, suggesting that policies promoting green finance may be more effective in driving sustainable development in these economies than solely focusing on social inclusion measures. The positive impact of green FDI further underscores the importance of attracting foreign capital for green projects. The study's findings have practical implications for policy-making, suggesting that OECD nations should focus on developing their green finance markets to promote sustainable growth.

This study contributes to the literature by analyzing the impact of green finance and social inclusion on green growth in OECD countries. The key finding is the significant positive role of green finance, while social inclusion shows insignificant impact. The authors recommend prioritizing policies focused on enhancing green digital finance, attracting green FDI, and mitigating economic uncertainty. Future research should consider country-specific analyses, the effects of social crises and financial market fluctuations, and the role of environmental taxation and sustainable literacy.

The study's limitations include the potential for omitted variable bias, the reliance on aggregate data, and the possibility that the relationship between variables might vary across different OECD countries. Future research could address these limitations by incorporating more detailed data and utilizing more sophisticated econometric techniques.