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Modeling the Nexus between geopolitical risk, oil price volatility and renewable energy investment; evidence from Chinese listed firms

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  • Zhao, Dong
  • Sibt e-Ali, Muhammad
  • Omer Chaudhry, Muhammad
  • Ayub, Bakhtawer
  • Waqas, Muhammad
  • Ullah, Irfan

Abstract

Improving energy efficiency and investing in renewable sources are key influential factors that may lead to sustainable results from climate change policies. Using the data from Chinese listed companies, this study intends to find the impact of green financing, oil price volatility, and geopolitical risk in dealing with renewable energy investment. Therefore, this study used OLS and two-stage IV-GMM estimating methods considering direct and indirect relationships between the variables of interest. Similarly, this study also uses the advanced series of estimators in which AMG and CCE-MG estimators are being utilised to validate further. This research confirms the importance of green funding and environmental taxes in encouraging investment in renewable energy sources. According to Heckman's two-stage model with endogenous effects on the Chinese economy, geopolitical risk affects green investments in both the short and long term. Further, the analysis bolsters the connection between green financing and renewable energy investment while validating the moderating function of green regulations. The research suggests that China should prioritize the growth of eco-friendly businesses so that investments in renewable energy sources become mainstream. By integrating theoretical and empirical findings, the study has helped policymakers to make better decisions when developing and implementing environmental initiatives.

Suggested Citation

  • Zhao, Dong & Sibt e-Ali, Muhammad & Omer Chaudhry, Muhammad & Ayub, Bakhtawer & Waqas, Muhammad & Ullah, Irfan, 2024. "Modeling the Nexus between geopolitical risk, oil price volatility and renewable energy investment; evidence from Chinese listed firms," Renewable Energy, Elsevier, vol. 225(C).
    • Handle: RePEc:eee:renene:v:225:y:2024:i:c:s0960148124003744
    DOI: 10.1016/j.renene.2024.120309
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