Green metal price volatility and environmentally sustainable real estate development nexus: A global perspective from post COVID-19 pandemic

ABSTRACT

This study examined the relationship between green metal price shocks and green real estate development using the Structural Vector Autoregressive (SVAR) model. Real-time daily dataset for the study covers the period from January 4, 2021, to December 30, 2022. The findings are presented using two methods: cumulative impulse responses and variance decompositions. The cumulative impulse responses show how structural shocks affect the volatility of green real estate over time. The variance decompositions show the percentage of the variation in green real estate volatility that is caused by each structural shock. The results showed that green real estate development responded negatively to green metal shocks for at least half of the observed period, and the energy price, specifically oil, had a greater and more persistent negative impact. This suggests that changes in oil prices may continue to have a significant influence on the development of green real estate projects and the broader transition towards environmentally sustainable practices in the construction industry. The explained variable, on the other hand, had a positive response to shocks associated with green finance in the latter part of the observed period. Policy and practical implications of the findings have also been discussed. © 2023