Asymmetric Impact Research Articles

Assessing the symmetric and asymmetric impact of technological innovations environmental quality in Qatar

Assessing the symmetric and asymmetric impact of technological innovations environmental quality in Qatar

Evidence of the internationalization of China's crude oil futures: Asymmetric linkages to global financial risks

Since its launch, China's crude oil futures (COIL) have gradually integrated with the international financial market but undoubtedly face more risks. For the purpose of exploring the influence mechanism between COIL and global risk, this paper uses a series of Granger causality tests to provide more evidence of COIL internationalization. In addition, we focus on exploring whether this influence mechanism has asymmetric characteristics. We choose a comprehensive new indicator, the Global Financial Risk Index (COVOL), to represent global financial risk, and also pay attention to three kinds of global risk refer to international energy, inflation, and financial system uncertainty. First, we find a marked asymmetry in the impact of global risks on COIL, especially energy-related risks, followed by financial system uncertainty. Second, COIL also has a significant asymmetric impact on global financial risks, including COVOL, GOIL, FSI, and EPU. Next, we further explore long-term and short-term changes in these asymmetric relationships. Empirical results have found that most asymmetric patterns exhibit long-term characteristics. Finally, given the potential impact of global extreme events, we provide an in-depth analysis of whether this asymmetric link still holds after the COVID-19 outbreak and the Russia-Ukraine conflict. These findings may provide important implications for improving coil market policy and related investment decisions.

Is fiscal deficit ‘curse’ or ‘haven’ for environmental quality in India? Empirical investigation employing battery of distinct ARDL approaches

Undoubtedly, throughout the past half-century, environmental quality has emerged as a significant obstacle to both economic and social endeavors. Recent local and international policy debates have focused on environmental deterioration and global warming, but how governments balance economic growth and environmental sustainability is still enigmatic. For this reason, we have examined the determinants of environmental quality in India from 1972 to 2021. More specifically, we have investigated whether the fiscal deficit is ‘curse’ or ‘haven’ for environmental quality (CO2) in India. Moreover, this study deliberated four other predictors, comprising technological development (TIN), fossil fuel consumption (FFC), urbanization (Ub), and human capital index (HCI). In order to attain this objective, a range of econometric estimation techniques are employed to ensure the validity and reliability of the outcomes. For instance, we have employed a battery of ARDL approaches, such as standard ARDL, nonlinear ARDL, and multiple threshold NARDL approaches. In light of our research findings, we will be focusing directly on the examination of the NARDL and MTNARDL outcomes. This is due to the empirical evidence indicating the existence of asymmetric effects resulting from FD on CO2 emissions in India. The NARDL approach reveals that the consequence of fiscal deterioration is more pronounced, and the influence of fiscal progress is mild in terms of CO2 emission growth. Further, the outcomes of the MTNARDL approach revealed that the size of the extremely low changes in FD is much higher than the extremely high changes in FD in both models. This implies that as the FD rises, CO2 ascends more significantly, and when the FD lowers, CO2 declines progressively. In a nutshell, FD has a long-run positive and asymmetric impact on CO2 in India; thus, we may conclude that FD is considered the ‘curse’ for CO2 in India. Furthermore, TIN, HCI, and Ub have detrimental effects on CO2, whereas FFC stimulates CO2 in India. This research work provides some important policy implications for environmentalists, economists and macroeconomic policymakers to promote a green and healthy environment.

Asymmetric impacts of ingroup behaviors on delay of gratification in preschoolers

Research has examined factors underlying the individual differences in delay gratification as childhood delay gratification predicts later life outcomes. Recent studies have focused on group behavior as a critical social factor affecting delay gratification. Here, our three preregistered experiments investigated whether ingroup behaviors encouraged and/or discouraged young children from selecting delayed options in a delay choice gratification test. Experiments 1 and 3 consistently found that 3–6-year-olds were less likely to select delayed choices when they believed that ingroup members selected immediate choices compared to when they had no information on members' behavior. In contrast, their performance on delaying gratification did not differ when they were informed that ingroup members select delayed choices versus when they had no ingroup information. However, these patterns were not observed in Experiment 2, which targeted 5- to 6-year-olds. Furthermore, Experiment 3 found that 3–6-year-olds did not change their evaluation of delay of gratification (e.g., preferred new individuals who delayed), even if ingroup members selected either immediate or delayed choices. Although these findings were supported by weak to moderate evidence with Bayesian analyses, we showed the asymmetric impact of ingroup behaviors on delay gratification in preschoolers. The current study potentially contributes to the understanding of how social factors shape delayed gratification in children.

Innovative strategies for green economic recovery: Enhancing efficiency in resource markets

The inefficiency and environmental degradation currently found in China's resource markets are hindering the country's green economic recovery. China has undergone significant economic transformations, but these have often been at the expense of environmental sustainability. This is particularly the case in resource markets. By employing a nonlinear autoregressive distributed lag (NARDL) model, this research investigates the impact of innovative strategies aimed at enhancing efficiency and sustainability in these markets. The years covered by the study are from 1985 to 2020. The study focuses on the role of technological advancements, policy reforms, and market-based incentives in fostering a green economic recovery. The results reveal that innovative strategies have a nonlinear, asymmetric impact on resource market efficiency. Specifically, technological innovations and market-based incentives show a more immediate effect, while policy reforms have a long-term impact. These findings offer a nuanced understanding of the pathways for green economic recovery in China, suggesting that a multi-faceted approach is essential if sustainable development is to be achieved.

Liquidity shocks and the negative premium of liquidity volatility around the world

We find that liquidity volatility negatively affects stock returns across international markets. This association remains consistent across various liquidity metrics and cannot be attributed to the influence of idiosyncratic volatility. Further analysis shows that the omitted liquidity decrease variable is the key driver of the negative premium of liquidity volatility. Considering the asymmetrical impact of liquidity decrease and increase on future stock returns, stocks displaying high liquidity volatility tend to experience significant liquidity decreases, which lead to lower average returns. Once the liquidity decrease is integrated into the pricing model, the negative return premium of liquidity volatility dissipates. Subsequent analysis underscores that the effect of liquidity decrease on returns is more pronounced in markets and periods characterized by diminished efficiency and heightened arbitrage costs.

Analyzing the non-linear association between urbanization and ecological footprint: an empirical analysis.

Due to urbanization's substantial impact on economic development and environmental quality, particularly in emerging nations, the subject has attracted major attention in recent years. Urbanization increases infrastructure, transportation, and high energy consumption demand, leading to increased environmental degradation. Therefore, this study examines how urbanization has affected environmental degradation in Pakistan using yearly data from 1970 to 2020. A non-linear autoregressive distributed lag (NARDL) model is applied to study the asymmetric impact of urbanization on ecological footprint per capita. The results show that urbanization is asymmetrically associated with environmental degradation. Positive changes in urbanization led to increased environmental degradation, while negative changes in urbanization led to a decline in environmental degradation in Pakistan. Foreign direct investment and industrial production are positive and significant factors of environmental degradation, while trade openness and money supply are negatively linked with environmental degradation in Pakistan. Economic growth shows a positive link, while economic growth square shows a negative link with environmental degradation. These findings also confirm the environmental Kuznets curve (EKC) hypothesis in Pakistan. It is suggested that the urbanization threshold should be analyzed to determine where environmental degradation tends to decline, and less polluting technology and renewable energy resources should be encouraged to reduce environmental degradation in Pakistan.

Unravelling the dynamics of human development and economic growth on crude oil production based on ARDL and NARDL models

This paper estimates and establishes the causality between the Human Development Index (HDI), Gross Domestic Product (GDP), inflation and CO2 emissions on crude oil production (COP) in Cameroon from 1977 to 2019. To do so, the Augmented Dicky-Fuller and Zivot-Andrews stationarity tests, ARDL and NARDL modelling, as well as Toda-Yamamoto causality test are performed. Unlike previous studies on COP, this study incorporates the asymmetric impact (NARDL). The results indicate that CO2 emissions and GDP have a negative impact on COP in the long-run, while HDI and inflation have a positive impact in the short-run. GDP and HDI have a non-linear impact in the short run, while in the long-run inflation and CO2 emissions have a non-linear impact on COP. From these results, it is interesting to note that, in order to allow future generations to benefit from the oil windfall. The diversification of the Cameroonian economy, the control of inflation and the use of less polluting crude oil extraction technologies must be imperative.•A step-by-step procedure of the ARDL, NARDL and causality test is provided.•The multiplier effects of GDP, HDI, inflation and CO2 emissions on COP are simulated.•The impact of GDP and HDI on COP is non-linear

On the factors influencing the ecological footprint: using an asymmetric quantile regression approach

PurposeIn the new global economy, environmental degradation is still among the crucial struggles braving policymakers. The intention of the current analysis, therefore, is to investigate the asymmetric impact of energy use, trade openness, population changes and urbanization, on the ecological footprint (EF) in four ASEAN countries by using time span data extending from 1972 to 2018.Design/methodology/approachThe stationarity of the variables was first demonstrated by using a quantile autoregression unit root test. Then the cointegration relationship among quantiles was verified. In the third step, this study investigated the pattern of causality in quantiles which allowed them to model any locational asymmetry in such a relationship. In the final part of the paper, the asymmetric quantile approaches the methods adopted to address the ways in which the considered variables impacted on the EF.FindingsThe outcomes demonstrated that the estimated coefficient of the variables was generally found significant and in line with the expected impact sign. Likewise, locational asymmetry was detected from the fact that the considered variables at the upper tails did not operate in the same way as those in the lower ones. In this case, the results suggest that a rise in energy consumption, as well as a negative shock to economic growth and/or trade openness, all diminish environmental quality. In contrast, promoting economic growth, a positive shock to trade openness, and human capital reduce environmental degradation.Originality/valueAs far as is known, the current study among the early attempt to explore the asymmetric impact of trade openness, energy use, population changes and urbanization, on the EF in the ASEAN countries.

Opening the black box of environmental governance: Environmental target constraints and industrial firm pollution reduction

Due to the increasingly serious problem of environmental pollution, environmental governance in various countries is constantly improving. To open the black box of environmental governance, this study assesses whether and how environmental target constraints affect pollution emissions from the perspective of firms’ behavior. Based on the exogenous impact of including environmental performance in officials' evaluations, the continuous difference-in-differences (DID) method was used. Benchmark analysis showed that the environmental target constraint policy effectively reduced the SO2 emissions of firms, especially polluting firms, and inhibited the emission of other air pollutants, exerting a collaborative governance effect on multiple pollutants. Expansion analysis showed that the environmental target constraint policy was beneficial for optimizing the energy structure and strengthening the pollution control of firms. However, the environmental target constraint policy did not effectively promote the green technology innovation of Chinese industrial firms. In addition, as a result of environmental target constraints, the distribution of the SO2 emission intensity of firms in each region tended to be uniform through an asymmetric impact on the entry and exit behavior of firms with different pollution levels. This study presents an objective foundation for developing an effective pollution control policy framework for other countries, especially developing countries.

Do Spot, Futures, and Options Markets Exhibit Price and Volatility Interdependence? Evidence from India

This paper analyses the price- and volatility-based interdependency among spot, futures, and options markets in a unified framework. The paper utilizes the vector error correction model generated under the TGARCH framework, the conventional pair-wise Granger causality test, the block exogeneity and vector Granger causality test, and Schwartz–Szakmary’s factor weights to decipher the price interdependence. The paper also uses the DCC-GARCH model to examine the existence of time-varying conditional correlation in volatility. The study finds evidence of the dependency among these three markets with a stronger leading role of spot against futures and options and significant positive/(negative) influence of the previous day’s spot/(futures) price change on options’ price change. Further, the asymmetric impact of price changes on conditional volatility is observed in the case of the spot and futures market. The results also exhibit the existence of time-varying conditional correlation among these markets with spillover effect.

Financial markets, energy shocks, and extreme volatility spillovers

In recent years, financial markets have experienced unprecedented uncertainties resulting from challenges such as the COVID-19 pandemic, energy shocks, and inflation mechanisms. This study investigates the interconnectedness of different financial markets (such as stocks, bonds, forex, oil, gold, and bitcoin) across extreme quantiles of volatility. To capture volatility spillovers, energy shocks, and inflation mechanisms, the study employs a novel technique called quantile-VAR, as traditional mean-based measures may not be suitable in extreme market conditions. The empirical findings indicate an increased density of networks in both the lower and upper tails of asset volatilities. Moreover, the results demonstrate an asymmetric impact of the COVID-19 outbreak, energy shocks, and inflation, with right-tail dependencies being more significant and common compared to left-tail dependencies. Additionally, the analysis of time-varying effects reveals significant shock events, ranging from the Shale Oil Crisis to the COVID-19 outbreak, including energy shocks stemming from the recent Russia-Ukraine war. These findings have important implications for investors, financial markets, fund and portfolio asset managers, and policymakers in managing risk, particularly during large shock events.

Poverty and financial development: an asymmetric and nonlinear ARDL analysis for India

PurposeThe primary objective of the paper is to examine the asymmetric Cointegration and asymmetric causality between financial development and poverty alleviation on annual data in Indian context over the period from 1980 to 2019.Design/methodology/approachFirst nonlinearity test by Brooks et al. (1999) is applied to ascertain the nonlinear behavior of the variables used. Once the nonlinear behavior of variables is confirmed, asymmetric and nonlinear unit root tests by Kapetanios and Shin (2008) are applied to check for the order of integration of selected variables. Next, nonlinear autoregressive distributed lag model (NARDL) is employed to analyze the asymmetric Cointegration. Finally, Hatemi-j- asymmetric causality tests is applied to work out the direction of asymmetric causality.FindingsThe empirical findings document the existence of asymmetries in the short-run as well as long-run between poverty and financial development. The asymmetry reveals that negative financial development shocks leave a more profound impact on poverty alleviation than their positive equivalents. The findings of Wald's test also confirm the presence of asymmetric Cointegration. The asymmetric cumulative dynamic multipliers used to examine the behavior of asymmetries and adjustments with respect to time lend credence to the results calculated using NARDL estimator. This result exhibits the robustness of the model. Furthermore, the result emanating from recently introduced asymmetric causality test reveals a unidirectional asymmetric causality between negative shocks in financial development and poverty. The findings of the present study necessitate the need for investigating asymmetric and nonlinear effects in finance–poverty nexus, which existent literature has completely neglected, in order to have relevant policy conclusions.Research limitations/implicationsThe study used “Per capita consumption expenditure” as a measure for poverty due to lack of continuous time series data on headcount ratio. In future, researchers can extend this study by incorporating headcount ratio as a measure of poverty in their respective works. There is further scope of research on this issue by finding out the impact of formal and informal sources of credit on poverty separately. A panel data study for developing countries over a period of time could further confirm/negate the findings of the present study.Originality/valueTo the best of the authors’ knowledge none of the studies in Indian context has scrutinized asymmetric and nonlinear impact of financial development on poverty. To dredge up asymmetric structures at work, the authors have used the highly celebrated NARDL estimator. To enrich the existent body of knowledge along the lines of asymmetric (nonlinear) linkages, the authors have also used recently introduced asymmetric causality test by Hatemi-j-(2012) to find out the direction asymmetric causality.

Nexus between Monetary Freedom, Political Stability and Exchange Rate with Sustainable Stock Market Development in Pakistan: A Comparative Analysis by ARDL and NARDL

This study scrutinizes both symmetric and asymmetric impact of monetary freedom (MF) on the sustainable stock market development (SMD) in Pakistan, in the presence of political stability and foreign exchange rate. The study uses the time series data for the period of 1992 to 2022, the study applies Non-linear Auto-regressive Distributed Lag (NARDL) and ARDL Bounds Testing for comparative analysis. Monetary freedom with sound political stability and stable foreign exchange rate do Granger Cause and significant correlation with the SMD of Pakistan. The results from ARDL Bound Testing show that MF and exchange rate has highly significant long-run impact on the SMD with coefficient values of 4.64 and 3.32. The Positive asymmetric cumulative dynamic multipliers (ACDMs) of MF have highly significant impact on SMD. Political stability has been a Positive Function of its ACDMs, while exchange rate has been a Negative Function of its respective ACDMs. The impact of exchange rate is highly significant with its Negative ACDMs coefficients of 17.42 and 16.76, denoting a long-lasting impact on the sustainable economic growth of Pakistan by strengthening the pace of stock market development. This comparative study will add revised practical credence to the existing literature on autoregressive models and will facilitate modified and improved policy-making at operational and strategic level to achieve decent economic growth under sustainable development goals (SDG).

Connectedness of Agricultural Commodities Futures Returns: Do News Media Sentiments Matter?

Using the novel daily commodity-specific Thomson Reuters Market Psych sentiment data derived from news, social media, press releases, and regulatory filings, this study investigates the asymmetric impact of news and social media sentiment on the futures return connectedness of agricultural commodities. We construct time-varying connectedness measures for agricultural commodities futures returns at different quantiles and show how these spillover measures depend on news sentiment under extreme events. Our results show that the impact of news media sentiment on agricultural commodity connectedness depends on the quantiles (lower, median, upper) and the type of sentiment (traditional news or social media). In particular, we find that social media sentiment has a statistically significant impact on the magnitude of shocks each commodity transmits to others, at both the lower and upper quantiles, indicating that the media sentiment effect is more substantial during extreme market periods.

A vaccine for volatility? An empirical analysis of global stock markets and the impact of the COVID-19 vaccine

The oscillation of COVID-19 growth has had a sustaining impact on financial markets. This study investigates the asymmetric impact of COVID-19 growth and recovery on financial markets. Examining ten epicenters of the virus from 01/01/2021 to 31/12/2021, we utilize a stepwise regression methodology and a diverse set of control variables. Controlling for volatility, credit risk, liquidity risk, monetary policy, gold, and oil, our findings indicate a significant impact of COVID-19 on equity indices. Vaccination growth correlates with positive price movements in the USA, UK, China, Japan, France, and Spain. Simultaneously, negative price trends align with virus growth in the USA, UK, China, Japan, Spain, and World models. A nexus of causality between COVID-19, global oil markets, and equity prices is identified, while credit and liquidity risks emerged as significant risk factors in China. Our results highlight the pertinence of swift vaccine developments, lockdown interventions, and central bank responses, providing valuable insights to governments, regulators, and all financial market stakeholders.

Does inflation affect asymmetrically to financial development in India? Fresh insights based on NARDL approach

PurposeThis study examines the possibility of asymmetric impact of inflation on the financial development (FD) in the case of Indian economy from 1980 to 2020. Moreover, the finance–growth hypothesis is also tested.Design/methodology/approachThe authors incorporated the “Nonlinear Autoregressive Distributed Lag” (NARDL) model due to Shin et al. (2014) to investigate the asymmetric impact of inflation on financial development. Asymmetric cumulative dynamic multipliers are also used to track the traverse of any short-run distortion towards the long-run cointegration.FindingsThe results revealed that inflation impacts the financial development negatively whereas the economic growth (EG) and trade openness have a positive effect. However, the effect of inflation on financial development is not symmetric. Moreover, the findings support the demand-led growth hypothesis.Originality/valueTo the best of the authors' knowledge, this is the first study examining the asymmetric effects of inflation on financial development in the Indian context. In addition, instead of using a single proxy to measure financial development, an index for financial development encompassing different aspects of the financial system has been incorporated.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-02-2023-0094

Green Household Technology and Its Impacts on Environmental Sustainability in China

China has made a commitment to achieve carbon neutrality by 2060, and promoting a green lifestyle is an essential means to this end. The primary aim of this study is to investigate the asymmetric impact of green household technology on environmental sustainability in China. To that end, we have employed linear and non-linear auto-regressive distributed lag models to identify this complicated effect. The empirical results suggest that green household technology’s positive change exerts significant and negative effect on carbon emission in the short and long terms. And the impacts of green household technology’s negative change on carbon emission are significantly negative but smaller than its positive change in the long run, while insignificant in the short term. The estimates endorse the asymmetric impact of green household technology on carbon emissions both in the short and long term. This finding suggests that the improvement of green household technology can reduce carbon emissions, while a decline in it causes carbon emissions to rise, and technological retrogression plays a less influential role than its development. This research is a groundbreaking point in discussing the way towards environmental sustainability from a green household technology perspective, which considers the asymmetric effect and provides meaningful insights for China to achieve sustainable development.

Investigating the asymmetric impact of renewable energy consumption and trade openness for carbon emission abatement using N-ARDL approach: a case of India

PurposeThis study investigates the asymmetric influence of renewable energy consumption (REC) and trade openness (TO) in the pathway of decarbonizing of Indian economy.Design/methodology/approachBy exploiting fifty years of annual time series data spanning from 1970 to 2019 with the augmentation of nonlinear autoregressive distributed lag technique with the consideration of GDP and industry value added (IVA) as control variables.FindingsOur This research not only demonstrates the asymmetric association among the employed variables but also shows that negative shock to REC stimulates emissions, where as positive shock on the same policy variable promotes environmental quality improvement. Negative shock to TO is found to be associated with the corresponding increase of environmental quality, but the positive shock on the same intensifies environmental pollution. IVA is also found to be associated with intensifying environmental squalor. In addition, the research provides the empirical evidence of existence of “EKC” hypothesis in India as long-run coefficient associated with GDP looks smaller than short-run coefficient of GDP.Research limitations/implicationsIt was difficult to include may other causal variables due to nonavailability of data pertaining to those variables.Practical implicationsMoreover, some policy guidelines have also been recommended for India at the end that may aid India to achieve net zero emissions by 2070.Originality/valueThis is an original research paper carried out by the authors and has not yet been submitted elsewhere.

Exploring the asymmetric impact of sustainability reporting on financial performance in the utilities sector: A longitudinal comparative analysis

This paper explores the longitudinal impact of Environmental, Social, and Governance (ESG) scores on company performance, considering firm value and financial accounting performance. Using a longitudinal fuzzy set qualitative comparative analysis (fsQCA) on a sample of 185 global listed companies in the utilities sector from 2018 to 2021, we demonstrate that various combinations of sub-dimensions of ESG activities determine the level of financial performance (FP). We use two accounting metrics and two market-based indicators and identify different configurations across time from the perspective of each measure. According to the accounting-based indicators, a good performance on the S pillar and an absence on the E pillar generate high financial outcomes across time, regardless of their performance on the G pillar. However, from the market perspective, both the E and S pillars are determinants for generating high FP, indicating that the three dimensions of ESG do not need to exist simultaneously to lead to high financial outcomes. This research contributes to the understanding of needed improvements to sector and industry-specific analyses focusing on the utilities sector, an environmentally sensitive but scarcely studied sector. The study specifically sheds light on how publicly traded utility companies should strategically combine efforts in the E, S, and G pillars based on whether their focus is on short-term profits or, conversely, long-term profits. Additionally, it expands the application of longitudinal fsQCA to research related to sustainability.