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COVID-19 and the transformation of emerging economies: Financialization, green bonds, and stock market volatility

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  • Yiming, Wang
  • Xun, Liu
  • Umair, Muhammad
  • Aizhan, Assilova

Abstract

The COVID-19 pandemic has brought about significant changes in the economies of emerging markets, particularly the E−7 economies. This research analyzes the impact of the pandemic on the financialization of oil prices, green bond issuance, and the stock market in these economies by using ARCH-LM analytics, the researchers can determine if the profit sequence at delay 10 exhibits heteroscedasticity at ***p < 0.01. The research period is conducted during March 1, 2017–June 30, 2022 to analyze the results before and during COVID-19 in E−7 countries. The financialization of oil prices has resulted in increased volatility and fluctuations in the stock market, highlighting the importance of understanding the role of financialization in market dynamics. The pandemic has also spurred a rise in issuing green bonds, indicating a shift towards sustainable finance and a recognition of the importance of environmental sustainability in economic recovery. In particular, China's leadership in green bond issuance underscores the growing trend towards sustainability in emerging markets. The findings of this research contribute to the growing body of literature on the impact of the pandemic on the global economy, highlighting the unique challenges and opportunities facing emerging markets. This study concludes with recommendations for policymakers and investors seeking to navigate these shifting market dynamics and foster sustainable economic growth in the E−7 economies.

Suggested Citation

  • Yiming, Wang & Xun, Liu & Umair, Muhammad & Aizhan, Assilova, 2024. "COVID-19 and the transformation of emerging economies: Financialization, green bonds, and stock market volatility," Resources Policy, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:jrpoli:v:92:y:2024:i:c:s0301420724003301
    DOI: 10.1016/j.resourpol.2024.104963
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    2. Guglielmo Maria Caporale & Luis Alberiko Gil-Alana & Sakiru A. Solarin & OlaOluwa S. Yaya, 2024. "Testing for Persistence in German Green and Brown Stock Market Indices," CESifo Working Paper Series 11207, CESifo.
    3. Cheng, WeiJin & Ming, Kai & Ullah, Mirzat, 2024. "Oil price volatility prediction using out-of-sample analysis – Prediction efficiency of individual models, combination methods, and machine learning based shrinkage methods," Energy, Elsevier, vol. 300(C).

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