Bridging nature and finance: Financial and macroeconomic determinants of biodiversity loss in emerging markets

This study examines the financial and macroeconomic factors affecting biodiversity loss in 51 emerging markets using the number of threatened species in biodiversity ecosystems for the years 2018 and 2022. We find that bank branch expansion and private sector credit expansion are associated with higher biodiversity loss, while financial inclusion in terms of increased number of bank depositors is associated with lower biodiversity loss. High inflation and low unemployment also increase biodiversity loss. The implication of the findings is that man-made activities in the financial sector and in the economy affect biodiversity loss in emerging market countries.