Synergistic dynamics unveiled: Interplay between rare earth prices, clean energy innovations, and tech companies' market resilience amidst the Covid-19 pandemic and Russia-Ukraine conflict

Abstract

Rare earth elements play a crucial role in supporting low-carbon energy generation technologies, such as electric motors in electric vehicles and the production of wind turbines. Additionally, these elements are utilized in a wide range of products manufactured by tech companies, including smartphones, aerospace components, and microelectronics. This paper aims to investigate the interplay between rare earth element prices (REMX), clean energy innovations (NEX), and the market of tech companies (PSE) from February 2018 to February 2023. To analyze the interdependencies between these markets, the study employs the cross-quantilogram (CQ) and wavelet local multiple correlation (WLMC) techniques. The findings of the investigation reveal a positive correlation between rare earth elements and the clean energy market, but only when both markets are in their respective extreme quantiles (10th and 90th). However, when the clean energy market is in a lower quantile and REMX is in a higher one for an extended period, there is either no significant interdependence or a negative relationship. Furthermore, the study identifies a positive co-movement between PSE and REMX in the short, intermediate, and extremely long-term. However, this relationship turns negative in the long run. The values of the coefficients fluctuate over time, particularly at larger scale periods of 8–16 when using the WLMC procedure. These findings have notable implications for stakeholders, including investors, managers, and policymakers, who are linked to the field of mineral resources and industries reliant on rare earth element-based technologies.