A comparative analysis of the financialization of commodities during COVID-19 and the global financial crisis using a quantile regression approach.

ABSTRACT

The paper aims at studying the financialization of commodities during coronavirus pandemic, thereafter referred as COVID19 and comparing the same with global financial crisis, thereafter referred as GFC. The connectedness among energy commodities particularly after 2020 was found strong, the effect is medium in case of metals and least in case of agriculture commodities. The findings proved that the financialization of commodities during COVID 19 was much strong as compared to GFC. An investigation of comparative analysis of financialization in developed countries and developing countries is also made, which indicates that connectedness is strong in developed countries as compared to developing countries. The findings reveal the effects were less significant from 2010 to 2019. Gold has significant effect with stock market during COVID 19 and GFC period, marking it a safe haven asset during crisis. Overall, the findings cast doubt on the hedging properties of energy commodities. The finding also indicates the COVID 19 had a deeper impact as compared to GFC.