Revisiting the impacts of the global financial stress on the net spillover between renewable energy and conventional energy markets: Empirical evidence from the exchange-traded funds
Optimizing Markets for Energy Stability, Muhammad Shahbaz,Hashim Zameer,Malin Song, Editör, Elsevier Science, Oxford/Amsterdam , London, ss.71-96, 2026
- Yayın Türü: Kitapta Bölüm / Araştırma Kitabı
- Basım Tarihi: 2026
- Doi Numarası: 10.1016/b978-0-443-29977-3.00012-3
- Yayınevi: Elsevier Science, Oxford/Amsterdam
- Basıldığı Şehir: London
- Sayfa Sayıları: ss.71-96
- Editörler: Muhammad Shahbaz,Hashim Zameer,Malin Song, Editör
- İstanbul Üniversitesi-Cerrahpaşa Adresli: Evet
Özet
Amid growing environmental awareness, particularly over the last decade, adopting renewable energy is crucial to managing carbon dioxide emissions and meeting the challenges of climate change. However, substantial investment in both infrastructure and technology is indispensable for the shift toward renewable energy. More specifically, the installation of solar panels and wind turbines demands considerable capital investment, a move that governments can promote through policies and incentives (Keshavadasu, 2023; Mardones, 2023; Wang et al., 2023). Hence, it can be acknowledged that this process generates employment opportunities, fosters economic expansion, and, consequently, catalyzes the ongoing development of renewable energy capacity in the long term (Li and Lee, 2022). Such an action not only enhances economic growth and job creation but also stabilizes environmental benefits that are at least of equal value compared to those provided to the economy. The point to consider is that our socioeconomic system does not exist in isolation from natural capital, which involves the land and natural resources’ stock (flora, fauna, climate, and other ecosystem services), considered one of the four basic factors of production. Services given by ecosystems are referred to as ecosystem services. These services are provided by natural capital stock. The importance of the role that biodiversity plays is almost unimaginable at this point. The diversity of life is maintained in ecosystems through diversity in several aspects of activities, such as ecological mechanisms, functional characteristics, biophysical structures, genetic diversity, species richness, and biotic interactions, in addition to provisioning and ensuring benefits to socioeconomic systems. The same categorization applies to their contribution, via provision, to important advantages in enhancing human well-being within the context of socioeconomic systems. Such advantages include nutrition, clean air and water, a healthy life, security, stability, and enjoyment, which can be translated into various other forms of value, such as economic value, health value, social value, and other major values. It is also possible for the socioeconomic system to involve responses that influence ecosystems. The activities undertaken by institutions, corporations, and policy frameworks in fields such as agriculture, forestry, fishery, and environmental management are included in these responses. In addition, the engagement of stakeholders and resource users is also included. The entire system is dynamic, with ecosystem services connecting the functional role of biodiversity to the socioeconomic advantages of the system. On the contrary, socioeconomic responses act as drivers of change that alter ecosystem states and biodiversity. Considering the importance of the aforementioned relationship, this study conducts an analysis in the context financial economics to examine exchange-traded funds (ETFs) related to both renewable energy and conventional energy (...). Parallel to our approach, recent studies have indicated that there is significant interplay among renewable energy prices and fossil fuel prices. For instance, Spelta and De Giuli (2023) employed multiresolution analysis by decomposing the European Renewable Index and the Morgan Stanley Capital International (MSCI) Europe Energy into their time-scale components and showed that the price dynamics of the renewable energy index surpass the price dynamics of fossil fuels at low time frequencies, but this relationship reverses at higher time frequencies. The relevant study underlines that the interplay among renewable energy and conventional energy prices may change across time horizons. On the contrary, Zhou et al. (2023) analyzed interrelations among oil prices, climate policy uncertainty, and renewable energy consumption for future periods. Their time-varying parameter (TVP) vector autoregressive model with stochastic volatility estimations demonstrated the time-varying feature among oil prices and renewable energy consumption. Herein, it should be emphasized that while conventional energy is analyzed mostly through oil prices in the scientific literature, the impacts of electricity prices on renewable energy have also gained ground in the literature, as evidenced by studies such as Perez and Garcia-Rendon (2021) and Shuqin and Xu (2023). The impact of conventional energy on renewable energy can also vary depending on whether a country is oil-importing or oil-exporting, and this may lead to asymmetrical effects. In this vein, Ali et al. (2022) employed bootstrap autoregressive distributed lag (ARDL) testing and nonlinear ARDL models and showed that increasing oil prices trigger environmental pollution in South Africa. Accordingly, they suggested that due to South Africa's dependence on imported oil, policymakers should build policies focused on cleaner sources of energy and promote environmental quality and green investment. Most recently, Jin and Kim (2023) conducted a panel analysis to determine the relationships between energy consumption, economic growth, and international oil prices. More precisely, they explored whether renewable energy assets can be used for hedging purposes to mitigate the outcomes of global oil price fluctuations. Based on data collected from 25 oil-importing countries Jin and Kim (2023) showed that renewable energy assets may have the capacity to reduce oil price risks. Their results suggested that fluctuations in oil prices could influence the use of renewable energy sources. Mukhtarov et al. (2022) considered both the positive and negative effects of high oil prices on CO2 emissions and the transition to renewable energy in Iran, an oilexporting country. It was uncovered that rising oil prices has negative impacts in terms of hindering the transition from conventional energy sources to renewable energy sources. However, Li and Lee’s (2022) panel estimates indicated that rising coal prices have a larger and more positive impact on renewable capacity than natural gas. In addition to the possible asymmetric effects between conventional and renewable energy, the relationship in question can be analyzed within the context of regime changes. To this end, Mohammed and Mellit (2023) employed various quantile-based analysis methods to investigate the interplay among oil prices and the indices of renewable energy and technology companies. They found that oil prices and the technology company index have asymmetrical impacts on clean energy. The quantile-on-quantile regression model estimations showed that the reaction of clean energy to changes in oil prices and the tech stock index is more pronounced in the upper quantile than in the lower quantile. Accordingly, it was highlighted that existing conditions or regimes associated with each indicator, in terms of their relationship with model variables, play a crucial role. Our study builds on the assumptions and findings of previous research, showing that there is substantial integration between renewable energy prices and conventional energy prices. However, we enhanced the analysis by including ETFs to determine the spillover between renewable energy prices and conventional energy ETFs based on the TVP model. There are no previous studies examining the interplay between renewable energy prices and conventional energy prices with ETFs, while the relevant model is used to determine the total connectedness among the variables under consideration. We also obtained net pairwise spillover indicators between renewable energy ETFs and conventional energy ETFs, which show the degree of hedging capability of each type of ETF on the other, in line with Jin and Kim (2023). Furthermore, we extend the research conducted by Jin and Kim (2023) and Mohammed and Mellit (2023) by investigating the nonlinear effects of systemic global financial stress on the net spillover between renewable energy ETFs and traditional energy ETFs.