Asymmetric Effect of Renewable Energy Generation and Clean Energy on Green Economy Stock Price: A Nonlinear ARDL Approach

Avazkhodjaev Salokhiddin Shakhabiddinovich,Lau Wee Yeap Lau Wee Yeap,Noor Azuddin Bin Yakob

doi:10.32479/ijeep.12754

Avazkhodjaev Salokhiddin Shakhabiddinovich, Lau Wee Yeap Lau Wee Yeap + Show 1 more

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https://doi.org/10.32479/ijeep.12754

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Abstract

This paper examines the asymmetric impact renewable energy generation and clean energy prices on green economy stock prices by employing monthly data for all three indices end on 2021M07, and start on 2010M12. The nonlinear ARDL approach (NARDL) is applied in order to find short-run and long-run asymmetries. The empirical results indicate that renewable energy generation significant negative impact on green economy stock prices. For the clean energy prices have a positive and negative significant impact on green economy stock prices in selected markets under concern. The short-run coefficients of clean energy stock prices have a significant positive affect on green economy stock prices. The Wald test results confirmed the green economy stock price adjustment is running towards the long- and short-run steady increment regarding positive and negative shocks in renewable energy generation and clean energy. Finally, the dynamic multipliers showed that prices of renewable energy generation have a positive (negative) impact on green economy stock prices. Indeed, clean energy prices respond quickly to the changes (both positive and negative) on green economy prices in all selected markets. In sum, the negative shocks dominate positive shocks in renewable energy generation and clean energy, and results indicate that a positive and negative relationship was noted between these covariates and green economy stock prices.

Highlights

The green economy is an alternative vision for growth and development; one that can generate economic development and improvements in people’s lives in ways consistent with advancing environmental and social well-being
A mentioned above, some empirical studies have examined the relationship between energy consumption and economic growth with nonrenewable and renewable energies, there is a gap in research pertaining to the relationship between renewable energy and green economy stock prices
The study covers this gap by focusing on renewable energy markets that have largely been ignored in prior research

Summary

Introduction

The green economy is an alternative vision for growth and development; one that can generate economic development and improvements in people’s lives in ways consistent with advancing environmental and social well-being. A frequent claim has been that the traditional economic models need to be reformed in order to address climate change, biodiversity losses, water scarcity, etc., while at the same time addressing key social and economic challenges. Renewable energy resources have become increasingly more important due to the fact that they have fewer negative impacts on the environment than other sources of energies and the growing limitations of fossil fuels. On the same side, developed and developing countries are in advance to increase renewable energy generation. In the United States (US) renewable energy resources are planned to generate enough clean energy and electricity in the two decades (Khoie et al, 2019). The new directive establishes a new renewable energy target for the Europen Union (EU) in 2030 of at least 32% and is binding for all members

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