Advancing Sustainable Industrialization Under <scp>SDG</scp> 9: The Role of Financial Globalization and Income Inequality

ABSTRACT This paper investigates how income inequality and financial globalization shape sustainable industrialization across 87 countries over 2000–2022, using the SDG 9 composite index as the outcome and the Method of Moments Quantile Regression (MMQR) to capture heterogeneous effects. Two principal explanatory variables‐share of income held by the top 10% and the financial globalization index‐are assessed alongside controls for egalitarian democracy, human development, trade openness, and natural resource rents. The results indicate that higher income concentration and deeper financial globalization improve SDG 9 performance, with the most potent effects observed at the lower‐ to middle‐quantiles of the SDG 9 distribution. Trade openness and human development exert consistently positive effects across all quantiles. In contrast, egalitarian democracy negatively affects SDG 9 outcomes, with the adverse impact becoming more pronounced in higher‐performing countries, while natural resource dependence primarily constrains sustainable industrialization at the upper quantiles. Robustness checks using alternative financial globalization and inequality measures, as well as GDP per capita, sustain the main patterns. Complementary causality analysis indicates predominantly unidirectional relationships, with sustainable industrialization being more closely shaped by distributional, resource, and institutional conditions and exhibiting limited feedback effects. The results highlight a fundamental tension between capital mobilization for green industrial upgrading and political or social arrangements emphasizing redistribution and environmental safeguards. The study underscores the importance of strategies that expand financial channels for industrial sustainability while minimizing inequality, offering insights for advancing the 2030 Agenda.