Dynamic risk connectedness of crude oil price and sustainable investment in the United States: evidence from DCC-GARCH.

Sustainable investment is widely regarded as an important market-based approach to achieving inclusive green growth. To achieve the inclusive green growth objective, companies providing sustainable products must be profitable enough to attract private capital. Oil price changes can however affect the profitability of such companies. This study assesses volatility transmission between crude oil prices and sustainable investment in the USA. Using the dynamic conditional correlation-generalized autoregressive conditional heteroskedasticity (DCC-GARCH) method, daily data from September 28, 2012, to October 19, 2022, is analyzed. There are several key findings from this analysis. The risk connectedness of crude oil and sustainable investment is found to vary with time. Results further show that the risk connectedness increases in periods of important economic and geopolitical events. The greatest risk connectedness of crude oil and sustainable investment is observed during the outbreak of coronavirus disease (COVID-19). Moreover, the result shows that crude oil is the main risk transmitter, whereas, both the energy efficiency and pollution mitigation indices (i.e., sustainable investment) are risk receivers, and crude oil is constantly dominating sustainable investment. The study findings provide valuable insights for investors and policymakers alike.

The role of energy, political stability, and real income on achieving carbon neutrality: asymmetric evidence.

Apart from business considerations stemming from the marketplace, businesses, individuals, and the economy at large, political decisions also play a role on environmental quality. Governments make a series of policies that impact private businesses, sectors, the environment, and the economy at large. In this paper, we test the asymmetric role of political risk on CO2 emissions, while controlling for renewable energy, non-renewable energy, and real income: policy toward environmental sustainability objectives in the context of Turkey. To realize the motive of this study, we capture the asymmetric effect of the regressors by adopting the nonlinear autoregressive distributed lag method (NARDL). This research adds to the environmental literature in terms of methodological and empirical. Methodologically, the study shows that a nonlinear relationship exists among the variables, and it has a significant impact on environmental sustainability targets. The outcome of the NARDL indicates that the increasing political risk, non-renewable energy, and economic growth follow a trajectory trend on carbon emissions, which is unsustainable in Turkey, but renewable energy is sustainable. Moreover, decreasing real income and non-renewable energy decreases carbon emissions. This research also deployed the frequency domain test to capture the causal association of the concerned variables and the outcome indicates political risk, renewable energy, non-renewable energy use, and real income are predictors of CO2 in Turkey. From this result, policies geared toward promoting a sustainable environment were formulated.

Economic growth, social, and welfare development during COVID-19 pandemic: do country-specific characters matter in the MENA region?

The coronavirus disease 2019 (COVID-19) pandemic has generated major shocks that have crippled the economic development of many countries and regions. The COVID-19 pandemic has hampered not only economic development but also global countries from achieving their sustainable development goals through various channels. Given their first experience, many countries have no guidelines for measuring the true impact of the pandemic on their economic and social development, either at the global, regional, or country level. Amid the current slow research development in this area, this study investigates the medium- and long-run impact of the COVID-19 pandemic on the United Nation's achievement of sustainable development goals. The sample in the study comprises the Middle East and North African countries, including Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, and Yemen. The social development goals are approximated by economic growth and human development index, which play as the dependent variables representing two models, respectively. From another aspect, independent variables are derived from three primary sectors: government, households, and healthcare providers. In estimating the model, the study implements the panel regression estimation method using multiple variance estimators. The study findings will help policymakers formulate deliberate policy plans to stabilize economic and social fluctuations in the region and to improve the performance of basic macroeconomic parameters.

Effects of climate policy uncertainty on sustainable investment: a dynamic analysis for the U.S.

Uncertainties surrounding climate change policies of the United States introduce some degree of risk into sustainable investment decisions in the country. This study is an attempt to provide a new perspective on the nature of this problem. Both the traditional and time-varying nonparametric quantile causality techniques are employed in investigating the effects of climate policy uncertainty on sustainable investment in the United States. Weekly time-series data from October 17, 2010, to August 28, 2022, is used for empirical analysis. Results from the traditional nonparametric quantile causality analysis reveal that climate policy uncertainty has a significant causal effect on both sustainable investment returns and volatility. The results also show that the impact on sustainable investment volatility is greater than the impact on sustainable investment returns. The time-varying nonparametric quantile causality analysis confirms that climate policy uncertainty in the United States affects both the returns and volatility of sustainable investment and that the impact is greater for volatility. It is recommended that governments and policymakers ensure that climate policy objectives are properly defined and adhered to, such that regulatory uncertainty would be limited and private sector participation in sustainable investment would be encouraged. In addition, policies clearly designed to incentivize sustainable investment by integrating risk premiums into expected profits could be employed.

Synergy effects of ICT diffusion and foreign direct investment on inclusive growth in Sub-Saharan Africa.

The present study critically examines the synergy effect of information communication technology (ICT) diffusion and foreign direct investment (FDI) on inclusive growth in Sub-Saharan African (SSA) countries using a modified system-generalized method of moments (GMM) model based on panel data covering the period 2005-2020. This study differs significantly from the previous studies in four ways: (i) this study uses a more comprehensive measure of ICT by computing a composite ICT index, which takes into account several ICT indicators; (ii) some existing study uses a narrow proxy of inclusive growth using the Gini index as a proxy, while others consider three patterns of economic growth dynamics (GDP growth, real, and per capita GDP). For robust analysis, we computed a composite inclusive growth index that takes into account several shared growth indicators; (iii) our model captures the heterogeneity effect of the interaction term of FDI and ICT diffusions on two groups of SSA countries, unlike the previous studies that estimated the joint impact of FDI and ICT on the whole group of countries; (iv) we contribute to the extant studies by determining the threshold level at which ICT diffusion may determine the effect of FDI on inclusive growth. Overall, empirical results show that the positive effect of FDI on inclusive growth could intensify when ICT diffusion is beyond a given threshold level, while inflation and vulnerable unemployment deteriorate inclusive growth, among others. We are of the opinion that ICTs should engage to cushion present and future environmental threats/natural catastrophes through improving geographical monitoring and concerted reaction coupled with other policy recommendations paying special attention to Sustainable Development Goals (SDGs) fifteen (15)-inclusive growth.

Re-visiting the resource curse hypothesis in the MINT economies.

Natural resources are extremely important to the economy, particularly in emerging nations such as the MINT (Mexico, Indonesia, Nigeria, and Turkey) nations. To improve their economic performance, such nations put a priority on maximizing the use of natural resources. These natural materials are the basis on which all living creatures rely, and they are the primary motivation behind contemporary production. Therefore, the current research utilizes a dataset spanning the period from 1970 to 2019 to assess the effect of natural resource on economic growth for the MINT nations. The present study uses a unique quantile-on-quantile regression (QQR) approach to assess this interrelationship. Furthermore, we apply the novel quantile causality suggested by Troster (2018), which identifies causality across quantiles. The findings from the QQR reveal that in the majority of the quantiles, the effect of natural resources on economic expansion is positive in Nigeria and Mexico, while it is negative in Indonesia and Turkey. In addition, a feedback causality is found between economic growth and natural resources for Mexico, Indonesia, and Nigeria. Based on the results, it is paramount for policymakers to develop policies or frameworks that promote cleaner energy sources and more effective use of natural resources, which can aid the country's economic growth.

The effect of financial globalization and natural resource rent on load capacity factor in India: an analysis using the dual adjustment approach.

Currently, the most crucial economic and ecological issues are related to environmental degradation and sustainability. On this backdrop, this paper examines the impact of financial globalization and natural resource rent on load capacity factor, using the novel dual adjustment approach and time-frequency domain causality approaches, in the case of India. This study contributes to the extant body of knowledge in the area of environmental economics. First, it is the first attempt to analyze the factors responsible for load capacity factor, specifically for India. As such, studies on environmental concerns on both the supply and demand sides are put into consideration. Empirical results show that only renewable energy consumption lessens the load capacity factor, while economic growth and financial globalization are positively correlated with the load capacity factor, and natural resource rent is insignificant in the short run. In the long run, only economic growth is negatively correlated with load capacity factor, while the other series positively influence load capacity factor. To reap greater ecological merits, policymakers should focus on transitioning from conventional non-renewable energy sources that contribute to rising carbon emissions to more cost-effective and dependable renewable sources of energy that support sustainable growth and a healthy environment.

The criticality of financial risk to environment sustainability in top carbon emitting countries.

This research examines the linkage between financial risk and carbon emissions using a quarterly dataset spanning from 1991 to 2019 for top carbon emitting countries. To achieve the study objective, this study apply quantile-on-quantile regression (QQR), the quantile regression (QR) approach for robustness check, and the nonparametric predictive test that identifies causality in mean and variance. Empirical findings from the QQR technique disclose the following: (i) financial risk decreases carbon emissions in the USA, Russia, Germany, and Canada; (ii) in China, India, Japan, Brazil, and Indonesia, financial risk enhances carbon emissions (iii) while we find mixed reactions in the case of South Korea. The outcomes of the conventional quantile regression also confirm the QQR outcomes, while that of nonparametric causality discloses evidence of causality in majority of quantiles from financial risk to carbon emissions. Based on these empirical outcomes, policymakers in the financial risk-induced-environmental degradation regions should consider implementing policies or reforms that would keep financial systems sound, in order to prevent shocks to the environment, and its attendant multiplier impact on the environmental sustainability targets implemented to protect both the immediate and the future generations.

Criticality of geothermal and coal energy consumption toward carbon neutrality: evidence from newly industrialized countries.

This study examines the long-term effects of coal and geothermal consumption on carbon emission while controlling for globalization and economic growth toward carbon neutrality in newly industrialized countries, including Brazil, China, India, Mexico, Malaysia, the Philippines, South Africa, Turkey, Indonesia, and Thailand for the period of 1990-2008. We compare the resulting relationships from various estimation techniques, such as fixed-effect ordinary least squares, dynamic ordinary least squares, fully modified ordinary least squares, and method of moment quantile regression. Overall, this study determines that the consumption of coal and geothermal energy is a significant determinant with a causal effect on carbon emission. The rise in coal energy consumption significantly increases carbon emission across all quantiles (0.1-0.90), whereas the rise in geothermal energy consumption reduces it across all quantiles (0.1-0.90). This relationship is also consistent across all quantiles (0.1-0.9). Policy suggestions are proposed on the basis of these findings.

Impacts of globalization and energy consumption on environmental degradation: what is the way forward to achieving environmental sustainability targets in Nigeria?

One of the major problems the world is currently facing is climate change. This is due to the use of fossil fuel combustion, which increases the presence of CO2 emissions and other greenhouse gases in the atmosphere in several countries of the world, which Nigeria is not exempted from. Against this background, this study examines the impacts of globalization, real income, urbanization, and energy consumption on environmental degradation; and proffer way forward to achieving environmental sustainability targets in Nigeria, using quarterly frequency time series data over a period 1971-2018. To achieve our study objectives, this study makes use of quantile-quantile (Q-Q) approach, developed by Sim and Zhou J Bank Financ 55:1-8, (2015). This approach groups together nonparametric estimation and quantile regression. Empirical results show that, in all quantiles, globalization, real income, urbanization, and energy consumption impact positively on environmental degradation. Thus, we are of the opinion that for the nation to achieve any meaningful environmental sustainability targets, (i) it must shift from economic activities that are dependent and driven by non-renewable energy sources; (ii) enact environmental laws and regulations that prevent indigenous and multinationals firms from using non-renewable energy sources in production activities; (iii) discourage rural-urban migration by enacting policies that would improve life in the rural areas, such as diverting investment of indigenous and multinational companies to be situated in the rural areas; and lastly, (iv) learn from jurisdictional experiences that have successfully replaces non-renewable energy sources with renewable ones for an overall economic growth and environmental sustainability targets for both the immediate and future generations.

Does political risk drive environmental degradation in BRICS countries? Evidence from method of moments quantile regression.

As a contribution to the political risk-environmental degradation literature, this study examines whether political risk drives environmental degradation in a multivariate framework. To achieve our study objective, we employed the method of moments quantile regression (MMQR) approach to analyze the effect of renewable energy use, economic growth, political risk, and globalization on quantiles of carbon emissions. The study utilized dataset stretching between 1990 and 2018 to investigate this interrelationship in the BRICS nations. The results generated from the MMQR mimic those of the three heterogeneous linear panel estimation techniques conducted (for robustness check), in terms of coefficient sign, magnitude, and significance. Using the MMQR technique, empirical results show that across quantiles (0.1-0.90), political risk, economic growth, and globalization positively affects environmental degradation. Renewable energy consumption, on the other hand, curb environmental degradation across all quantiles (0.10-0.90). Furthermore, the outcomes of the FMOLS, DOLS, and FEOLS corroborated the MMQR outcomes. In addition, the outcomes of the Dumitrescu-Hurlin panel causality revealed that renewable energy use, political risk, economic growth, and globalization can significantly predict CO2 emissions in the BRICS nations. The findings offer intuition for policymakers to lessen CO2 emissions in BRICS nations via diversification and clean energy technologies such as carbon capture and storage.

Revisiting oil rents-output growth nexus in Nigeria: evidence from dynamic autoregressive distributive lag model and kernel-based regularized least squares approach.

Given the dominant role of oil in terms of foreign exchange earnings in Nigeria, this study revisits the oil rents and output growth nexus, using the novel dynamic autoregressive distributive lag (DYNARDL) model and kernel-based regularized least squares (KRLS) approach over the period 1973-2020. The major finding from this study is that oil rents are less significant for output and also exhibit decreasing marginal effect on output growth in Nigeria. However, our robustness result shows that oil revenue is positive and significantly affects output growth, while corruption dampens output growth. Result from the oil revenue model with a minimum root square mean error, when compared with the oil rents model, corroborate the finding. We are thus of the opinion that oil revenue is more important for output growth in Nigeria than oil rents. Having established this fact, it is recommended that policymakers and the government should accord utmost attention to boosting oil revenue via transparency and accountability. They should also ensure a lasting solution to the nation's high dependency on refined crude oil products importation for a sustainable economic growth and development. Also, more efforts should be directed at developing the seven identified strategic solid minerals to further enhance the revenue base of the government.

Does interaction between technological innovation and natural resource rent impact environmental degradation in newly industrialized countries? New evidence from method of moments quantile regression.

As a contribution to the technological innovation-natural resource rent-environment literature, this study examines the technological innovation and natural resource rent in an environmental Kuznets curve (EKC) multivariate framework. We employed reliable, robust, and efficient novel panel estimations methods on a sample of 10 newly industrialized countries (NICs) over the periods 1990 and 2018. To achieve our study objective, we employ the method of moments quantile regression (MMQR) approach to analyze the effects of the exogenous variables over the range of diverse quantiles of carbon emissions. Results generated from the MMQR mimic that of the three heterogeneous linear panel estimations (fully modified ordinary least square, the dynamic ordinary least square, and the fixed effects ordinary least square) in terms of the sign and magnitude. The result affirms the existence of the environmental Kuznets curve (EKC) hypothesis in NICs across all quantiles (0.1-0.95). In addition, technological innovation and renewable energy consumption improve environmental quality in NICs across quantiles (0.1-0.95), while the joint impact of technological and natural resource rent mitigates environmental degradation from lower to higher quantiles (0.1-0.90). Moreover, technological innovation is found to exert an indirect favorable impact on the environment through the pathway of natural resources. Thus, technological innovation can be anticipated to enhance sustainable natural resources exploration in the NICs. In line with these crucial outcomes, this research proposes that the NICs should promote technological innovation, promote sustainable natural resource exploitation, and expedite economic expansion rates via the sustainable transformation of their production and consumption processes.

The role of economic complexity in the environmental Kuznets curve of MINT economies: evidence from method of moments quantile regression.

In the face of mounting climate change challenges, reducing emissions has emerged as a key driver of environmental sustainability and sustainable growth. Despite the fact that research has been conducted on the environmental Kuznets curve (EKC), few researchers have analyzed this in the light of economic complexity. Thus, the current research assesses the effect of economic complexity on CO2 emissions in the MINT nations while taking into account the role of financial development, economic growth, and energy consumption for the period between 1990 and 2018. Using the novel method of moments quantile regression (MMQR) with fixed effects, an inverted U-shape interrelationship is found between economic growth and CO2 emissions, thus validating the EKC hypothesis. Energy consumption and economic complexity increase CO2 emissions significantly from the 1st to 9th quantiles. Furthermore, there is no significant interconnection between financial development and CO2 emissions across all quantiles (1st to 9th). The outcomes of the causality test reveal a feedback causal connection between economic growth and CO2, while a unidirectional causality is established from economic complexity and energy use to CO2 emissions in the MINT nations. Based on the findings, we believe that governments should stimulate the financial sector to provide domestic credit facilities to industrialists, investors, and other business enterprises on more favorable terms so that innovative technologies for environmental protection can be implemented with other policy recommendations.

The role of electricity consumption, capital, labor force, carbon emissions on economic growth: implication for environmental sustainability targets in Nigeria.

Despite consistent investments, grants, and other concessions in the power sector, nationwide power outages still remain an issue, even in 2020, disrupting business operations, contributing to huge recurrent expenses on generators and alternative sources of electricity in homes, businesses, and institutions. In this paper, we examine the role of electricity consumption on economic growth, while controlling for labor, capital, and carbon emissions, using the autoregressive distributed lag (ARDL) and the novel dynamic ARDL (DYNARDL) simulation analysis over the periods 1981-2019. Empirical results show that electricity consumption, capital, and labor exert positive inelastic impacts, while carbon emissions exert negative inelastic significant impact on economic growth within the period under investigation. From policy standpoint, we are of the opinion that stable supply and consumption of electricity can possibly boost economic growth and engender social stability in Nigeria. Thus, there is a need to strengthen the effectiveness of power sector and its energy generating agencies by ensuring periodic replacement of worn-out equipment in terms of adequately financed and efficient labor in order to enhance the contribution of the sector on economic growth, while in terms of environmental degradation, policy makers should work towards promotion of green economy for a sustainable economic growth and environment in Nigeria.

Does political stability contribute to environmental sustainability? Evidence from the most politically stable economies.

The study evaluates the effect of political risk on CO2 emission in the top 10 most politically stable economies (Australia, Canada, Germany, Finland, Denmark, Norway, Netherlands, New Zealand, Sweden, and Switzerland) from 1991/Q1 and 2019/Q4. To the investigators' understanding, this is the first empirical analysis that inspects the effect of political risk on CO2 emissions in the top 10 most politically stable economies. Therefore, the current paper fills a gap in the existing literature. Innovative quantile-on-quantile regression and quantile causality approaches are applied to explore this nexus. The quantile-on-quantile regression results reveal that in the majority of the quantiles, political risk enhances environmental quality for the case of Norway, Sweden, Canada, and Switzerland. Moreover, political risk degrades the quality of the environment in Australia, Germany, and Denmark, while the outcomes were mixed for the rest. Since political stability has encouraged international corporations to invest. As a result, guaranteeing political stability will attract more foreign investment, pressuring the governments of these countries to treat the climate catastrophe more urgently. Moreover, reforms should be aimed at sustaining existing environmental policies related to the green economy, while local and international firms should vigorously pursue investments in renewable energy sources and energy-saving-efficient technologies.

Asymmetric nexus among financial globalization, non-renewable energy, renewable energy use, economic growth, and carbon emissions: impact on environmental sustainability targets in India.

Financial globalization has been argued to contribute to the increase/decrease in greenhouse gases and hence global temperature. India, according to International Energy Agency (IEA), is the third largest emitter of greenhouse gases globally, where the consumption of the few rich produces about seven times carbon emissions when compared with the poorest households. This current research explores the asymmetric effect of financial globalization on carbon emissions, while controlling for non-renewable energy utilization, renewable energy consumption, and economic expansion. The study uses yearly data stretching from 1970 to 2018 and batteries of econometric approaches in order to investigate these associations. The outcomes of the NARDL unveiled that (i) a positive (negative) shock in non-renewable energy utilization increases (decrease) carbon emissions; (ii) favorable (unfavorable) variations in renewable energy consumption decrease carbon emissions; (iii) a favorable shock in financial development contributes to carbon emissions; and (iv) a positive shock in growth impacts carbon emissions positively. Based on the empirical outcomes, we are of the opinion that policymakers should intensify efforts in putting in place appropriate environmental policy (green economy) that emphasizes the importance of renewable driven economy via energy-saving and energy-efficient technologies. Else, increased consumption on non-renewable energy sources among the few rich in India and any other countries struggling with implementing green economy would be devastating to both the immediate and future generations.

The persistence of precious metals and oil during the COVID-19 pandemic: evidence from a fractional integration and cointegration approach.

In this paper, the behavior of precious metals and oil is examined using a fractionally integrated and cointegrated modeling approach. Using daily data from January 2015 to December 2020 and using both endogenous and exogenous structural breaks, we examine the behavior of the related series before and during the COVID-19 pandemic with the aim of investigating whether the degree of persistence has changed since the onset of COVID-19. We found that precious metals and oil exhibit long memory and are mean reverting regardless of the sample considered as the fractional parameter d < 0.5. However, when structural breaks are taken into consideration, an increase in persistence is found during the COVID-19 as compared to the period before it. In addition, the fractionally cointegrated vector autoregressive (FCVAR) model of Johansen and Nielsen (2010, 2012) is used to examine the existence of long-run relationship among precious metals and oil price. We find the integrated parameters at d < 0.5 for all samples except for the pre-COVID-19 sample. This highlights that the FCVAR is a better fit for the full sample and the COVID-19 and the COVID-19 pandemic period sub-samples, as the fractional parameter is d < 0.5 while the CVAR model is better fit for the pre-COVID-19 period where d> 0.5. Both cointegration techniques alongside the parameter stability tests lend support to the existence of a persistence and stable long-run relationships among the series irrespective of the sample period considered. Attendant policy recommendations for investors and policymakers are recommended.

Appraising the oil-stock nexus during the COVID-19 pandemic shock: a panel threshold analysis.

We examine the oil-stock nexus in 24 countries amidst the COVID-19 pandemic and test for threshold effects on oil prices using Hansen (1999) panel dynamic threshold model and recent extensions of Kremer et al. (2013) and Seo and Shin (2016). We find evidence of nonlinearities and threshold effects in oil prices. As an addition to literature, our estimated model shows that stock market prices react in a regime-style manner, when the joint effects of oil prices, exchange rate changes, number of reported cases, and the number of death due to COVID-19 pandemic are analyzed. This is in support of the theoretical model of investor sentiment by Barberis et al. (1998). Therefore, we are of the opinion that policymakers, governments, and investors in their business decision-making process should put into consideration and also observe changes in the global reported cases alongside the number of deaths and how oil prices are evolving, as the global economy is further affected by the COVID-19 pandemic shock.