Renewable energy deployment and geopolitical conflicts.

This paper investigates whether geopolitical conflicts play a critical role in stimulating countries to shift toward clean energy solutions. We use the panel regime-switching models, which allow us to capture the nonlinear dynamics of the energy transition. Our results for a panel of developed and emerging countries reveal that the geopolitical context does not impact the renewable-income nexus; however, we find that adverse geopolitical events would impact the diffusion of alternative energy sources depending on the level of economic development. Rising geopolitical conflicts would encourage high-income nations to switch toward low-carbon energy sources. Considering the increasing number of regional conflicts, less developed countries must urgently develop their economies away from traditional energy sources and enhance the contribution of the renewable sector.

Climate change and government policy: Fresh insights from complexity theory.

Governments worldwide are increasingly concerned about ensuring a balance between economic and environmental well being. Global economies, particularly developing ones, emphasize the importance of achieving escofriendly growth to maintain the levels of the ecological footprint while achieving higher economic growth. The ecological footprint is a comprehensive indicator of environmental degradation. It is used to assess the state of the environment because it reflects the impact of all human activities on nature. This study contributes to the literature by offering a novel analytical approach for solving complex interactions of ecological footprint antecedents, advancing the theoretical reasoning behind how government policy combines to explain the ecological footprint from some G7 countries (France, Italy, Japan, United Kingdom, and Germany) from 1996 to 2020. To establish a composite score of environmental footprint, we used complexity theory as well as fuzzy set qualitative comparative analysis (fsQCA) and necessary condition analysis (NCA). Our analysis revealed that low expenditures on environmental protection and waste management, low taxes on transport, and high energy use are sufficient conditions to be included in the causal configurations for a high ecological footprint. Additionally, the sufficient solution, which has the highest coverage score that produces a low ecological footprint relies on high expenditure on environmental protection and high taxes on transportation. In this framework, Japan, Italy, and France have more effective government policies in terms of reducing the ecological footprint.

Systematic and Unsystematic Determinants of Sectoral Risk Default Interconnectedness.

Assessing the financial stability of the banking industry, particularly in credit risk management, has become extremely crucial in times of uncertainty. Given that, this paper aims to investigate the determinants of the interconnectedness of sectoral credit risk default for developing countries. To that purpose, we employ a dynamic credit risk model that considers a variety of macroeconomic indicators, bank-specific variables, and household characteristics. Moreover, the SURE model is used to analyze empirical data. We find the connection between macroeconomic, bank-specific, and household characteristics, and sectoral default risk. The outcomes of macroeconomic factors demonstrate that few macroeconomic determinants significantly influence the sector's default risk. The empirical results of household components reveal that educated households play a substantial role in decreasing sectoral loan defaults interconnectedness and vice versa. While for bank-specific characteristic, we find that greater bank profitability and specialization have substantially reduced loan defaults.

Global pandemic crisis and risk contagion in GCC stock markets.

This study investigates how the COVID-19 outbreak has shaped the volatility spillover between oil and Gulf Cooperation Council (GCC) stock markets. Contagion analysis is conducted by implementing a vector error correction (VECM) asymmetric BEKK model, wherein both cointegration and asymmetric features are considered. Financial market uncertainty caused by the recent health crisis is captured using Baker et al.'s (2020) newly developed infectious disease tracker. Our results indicate a significant discrepancy in the GCC group, as shock and volatility linkages between oil and equities are more apparent for some countries but not for others. The estimated VECM-asymmetric BEKK model reveals cross-market asymmetric spillover effects only in Kuwait, Qatar, and Saudi Arabia. We report that the global pandemic has strongly affected crude oil market volatility, while the GCC region seems to be less affected by the emergence of the new infectious disease. Our findings underscore the diversification opportunities offered by Gulf equity markets to international investors.

Covid-19 vaccination, fear and anxiety: Evidence from Google search trends.

Covid-19 vaccination was associated with a general feeling of hesitancy, and its arrival increased fear and economic anxiety. This paper investigates the impacts of Covid-19 vaccination on fear and economic anxiety using a worldwide sample of 194 countries observed from December 1st, 2020 to March 4th, 2021. The difference-in-differences investigation approach shows that with the vaccine's arrival, the Google search trends measuring fear and anxiety are increasing. The arrival of the vaccine has created a general feeling of fear, and people have a lack of confidence in the vaccine's efficiency to overcome the Covid-19 crisis. Specifically, anxiety increased when the delta variant was discovered in India. Governments' interventions must ensure that the Covid-19 vaccine does not have adverse side effects that can harm public health. We suggested that policy makers should focus on increasing the number of older adults willing to receive the vaccine. It can be effective in explaining the benefits of the vaccine, and denying false information about the vaccine and its serious side effects.

Business case complexity and environmental sustainability: Nonlinearity and optimality from an efficiency perspective.

The question of whether it is possible to "do well by going green" has been debated at length in the literature on environmental sustainability, but no consensus has been reached to date. Building on stakeholder theory in that a firm's environmental sustainability can improve its competitive advantage, this study investigates the impacts of sustainable environmental practices on the competitiveness of 28 international airlines over 2010-2018. First, we use dynamic network data envelopment analysis to estimate airline operational efficiency as a measure of competitiveness. Second, we use a panel smooth transition regression (PSTR) model to test for nonlinearities and regime-switching behaviors between variables. Then, to account for endogeneity bias, we develop and estimate an instrumental variable PSTR (IV-PSTR) model. The empirical results indicate that the relationship between environmental sustainability and competitiveness has an inverted U shape, meaning there is an optimal level of environmental sustainability beyond which competitiveness decreases. Therefore, it is important for airline managers to understand that very high levels of investment in sustainable practices can have more negative effects compared to very little investment. The study concludes by providing implications for theory and practice.

Oil price, US stock market and the US business conditions in the era of COVID-19 pandemic outbreak.

This paper contributes to Covid-19 outbreak impacts literature. We investigate the connectedness between stock market and oil prices under bullish and bearish economic conditions and uncertainty level at different investment horizons. We applied the wavelet framework on daily dataset cover the pre-COVID-19 and COVID-19 period. We find that the linkage between the economic and financial pairs is characterized by significant changes over the time during the sample period, where the huge co-movements has been identified during the pandemic period at the low scale. We show that due to lockdown policy and oil price shock, the stock return decline, the aggregate business conditions reached its lowest level and the uncertainty increase. The result indicates that the COVID-19 outbreak negatively affects the economy and the financial markets and support the sensitivity, especially between oil-stock, and economic condition and uncertainty.

Effects of the COVID-19 pandemic on the US stock market and uncertainty: A comparative assessment between the first and second waves.

This paper makes the first comparative assessment of the impacts of the first and second waves of the ongoing COVID-19 pandemic for the US stock market and its uncertainty. To this end, we investigate the dynamic conditional correlation and the asymmetric impacts of shocks on the correlation between the US and Chinese stock markets before and during the COVID-19 crisis. Furthermore, we analyze and compare the relationship between the COVID-19 pandemic and US returns and uncertainty during the first and second waves of the pandemic. First, we find that the dynamic correlation approach supports the presence of volatility spillovers (contagion effects) between the two stock markets, especially during the rapid spread phase of COVID-19 in the US. Second, the analysis of news impact correlation surfaces shows that the shocks to the US and Chinese markets have asymmetric effects on the correlation between the two markets. Finally, we find a persistent link between US returns, uncertainty, and the COVID-19 pandemic during the first and second waves of the outbreak. Our results prove that the pandemic has shown harmful consequences for financial markets in general and the US economy in particular.