IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v17y2024i11p2563-d1401800.html
   My bibliography  Save this article

Examining the Spillover Effects of Renewable Energy Policies on China’s Traditional Energy Industries and Stock Markets

Author

Listed:
  • Haiwen Zhao

    (Médicis Business School, 75013 Paris, France)

  • Miao Yu

    (School of Mathematics and Information Science, Guangzhou University, Guangzhou 510006, China)

  • Juan Meng

    (Business School, Hunan First Normal University, Changsha 410205, China)

  • Yonghong Jiang

    (School of Economics, Jinan University, Guangzhou 510006, China)

Abstract

With the development and refinement of the carbon emissions trading market, the relationship between the carbon market and the stock market has grown increasingly intertwined. This has led to a surge in research investigating the interactions between the carbon market and related sectors. This study examines the intensity and direction of spillover effects among ten industries associated with carbon emissions, spanning traditional and emerging energy sectors. Through static analysis, we find that spillover effects between industries in the carbon and stock markets are bidirectional and asymmetric. Dynamic analysis reveals that the carbon market, acting as the primary recipient of spillover effects, is notably influenced by traditional energy industries such as coal and oil, followed by photovoltaics, new energy vehicles, and others. The magnitude of these spillover effects is subject to fluctuations influenced by energy crises and events like the COVID-19 pandemic, while policy interventions can alter the overall trends in net spillover effects across various industries.

Suggested Citation

  • Haiwen Zhao & Miao Yu & Juan Meng & Yonghong Jiang, 2024. "Examining the Spillover Effects of Renewable Energy Policies on China’s Traditional Energy Industries and Stock Markets," Energies, MDPI, vol. 17(11), pages 1-18, May.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:11:p:2563-:d:1401800
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/17/11/2563/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/17/11/2563/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Francis X. Diebold & Kamil Yilmaz, 2009. "Measuring Financial Asset Return and Volatility Spillovers, with Application to Global Equity Markets," Economic Journal, Royal Economic Society, vol. 119(534), pages 158-171, January.
    2. Diebold, Francis X. & Yılmaz, Kamil, 2014. "On the network topology of variance decompositions: Measuring the connectedness of financial firms," Journal of Econometrics, Elsevier, vol. 182(1), pages 119-134.
    3. Tiwari, Aviral Kumar & Aikins Abakah, Emmanuel Joel & Gabauer, David & Dwumfour, Richard Adjei, 2022. "Dynamic spillover effects among green bond, renewable energy stocks and carbon markets during COVID-19 pandemic: Implications for hedging and investments strategies," Global Finance Journal, Elsevier, vol. 51(C).
    4. Gong, Xu & Shi, Rong & Xu, Jun & Lin, Boqiang, 2021. "Analyzing spillover effects between carbon and fossil energy markets from a time-varying perspective," Applied Energy, Elsevier, vol. 285(C).
    5. Su, Chi-Wei & Pang, Li-Dong & Qin, Meng & Lobonţ, Oana-Ramona & Umar, Muhammad, 2023. "The spillover effects among fossil fuel, renewables and carbon markets: Evidence under the dual dilemma of climate change and energy crises," Energy, Elsevier, vol. 274(C).
    6. Diebold, Francis X. & Yilmaz, Kamil, 2012. "Better to give than to receive: Predictive directional measurement of volatility spillovers," International Journal of Forecasting, Elsevier, vol. 28(1), pages 57-66.
    7. Huang, Yumeng & Dai, Xingyu & Wang, Qunwei & Zhou, Dequn, 2021. "A hybrid model for carbon price forecastingusing GARCH and long short-term memory network," Applied Energy, Elsevier, vol. 285(C).
    8. Tan, Xueping & Sirichand, Kavita & Vivian, Andrew & Wang, Xinyu, 2020. "How connected is the carbon market to energy and financial markets? A systematic analysis of spillovers and dynamics," Energy Economics, Elsevier, vol. 90(C).
    9. Andrew Adewale Alola & Festus Victor Bekun, 2021. "Pandemic outbreaks (COVID-19) and sectoral carbon emissions in the United States: A spillover effect evidence from Diebold and Yilmaz index," Energy & Environment, , vol. 32(5), pages 945-955, August.
    10. Li, Yan & Feng, Tian-tian & Liu, Li-li & Zhang, Meng-xi, 2023. "How do the electricity market and carbon market interact and achieve integrated development?--A bibliometric-based review," Energy, Elsevier, vol. 265(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lei, Heng & Xue, Minggao & Ye, Jing, 2024. "The nexus between ReFi, carbon, fossil energy, and clean energy assets: Quantile time–frequency connectedness and portfolio implications," Energy Economics, Elsevier, vol. 132(C).
    2. Yang, Ming-Yuan & Chen, Zhanghangjian & Liang, Zongzheng & Li, Sai-Ping, 2023. "Dynamic and asymmetric connectedness in the global “Carbon-Energy-Stock” system under shocks from exogenous events," Journal of Commodity Markets, Elsevier, vol. 32(C).
    3. Chen, Jinyu & Liang, Zhipeng & Ding, Qian & Liu, Zhenhua, 2022. "Quantile connectedness between energy, metal, and carbon markets," International Review of Financial Analysis, Elsevier, vol. 83(C).
    4. Mhadhbi, Mayssa, 2024. "The interconnected carbon, fossil fuels, and clean energy markets: Exploring Europe and China's perspectives on climate change," Finance Research Letters, Elsevier, vol. 62(PB).
    5. Guangxi Cao & Fei Xie, 2024. "Extreme risk spillovers across energy and carbon markets: Evidence from the quantile extended joint connectedness approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 2155-2175, April.
    6. Zhou, Yuqin & Wu, Shan & Zhang, Zeyi, 2022. "Multidimensional risk spillovers among carbon, energy and nonferrous metals markets: Evidence from the quantile VAR network," Energy Economics, Elsevier, vol. 114(C).
    7. Zhou, Wei & Chen, Yan & Chen, Jin, 2024. "Dynamic volatility spillover and market emergency: Matching and forecasting," The North American Journal of Economics and Finance, Elsevier, vol. 71(C).
    8. Guangxi Cao & Fei Xie & Meijun Ling, 2022. "Spillover effects in Chinese carbon, energy and financial markets," International Finance, Wiley Blackwell, vol. 25(3), pages 416-434, December.
    9. Gabauer, David & Chatziantoniou, Ioannis & Stenfors, Alexis, 2023. "Model-free connectedness measures," Finance Research Letters, Elsevier, vol. 54(C).
    10. Wang, Zi-Xin & Liu, Bing-Yue & Fan, Ying, 2023. "Network connectedness between China's crude oil futures and sector stock indices," Energy Economics, Elsevier, vol. 125(C).
    11. Inglesi-Lotz, R. & Dogan, Eyup & Nel, J. & Tzeremes, Panayiotis, 2023. "Connectedness and spillovers in the innovation network of green transportation," Energy Policy, Elsevier, vol. 180(C).
    12. Zhao, Lu-Tao & Liu, Hai-Yi & Chen, Xue-Hui, 2024. "How does carbon market interact with energy and sectoral stocks? Evidence from risk spillover and wavelet coherence," Journal of Commodity Markets, Elsevier, vol. 33(C).
    13. Zhang, Wenting & He, Xie & Hamori, Shigeyuki, 2022. "Volatility spillover and investment strategies among sustainability-related financial indexes: Evidence from the DCC-GARCH-based dynamic connectedness and DCC-GARCH t-copula approach," International Review of Financial Analysis, Elsevier, vol. 83(C).
    14. Oktay Ozkan & Salah Abosedra & Arshian Sharif & Andrew Adewale Alola, 2024. "Dynamic volatility among fossil energy, clean energy and major assets: evidence from the novel DCC-GARCH," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-19, June.
    15. Abakah, Emmanuel Joel Aikins & Brahim, Mariem & Carlotti, Jean-Etienne & Tiwari, Aviral Kumar & Mensi, Walid, 2024. "Extreme downside risk connectedness and portfolio hedging among the G10 currencies," International Economics, Elsevier, vol. 178(C).
    16. Lucey, Brian & Ren, Boru, 2023. "Time-varying tail risk connectedness among sustainability-related products and fossil energy investments," Energy Economics, Elsevier, vol. 126(C).
    17. Su, Chi-Wei & Pang, Li-Dong & Qin, Meng & Lobonţ, Oana-Ramona & Umar, Muhammad, 2023. "The spillover effects among fossil fuel, renewables and carbon markets: Evidence under the dual dilemma of climate change and energy crises," Energy, Elsevier, vol. 274(C).
    18. Banerjee, Ameet Kumar & Sensoy, Ahmet & Goodell, John W., 2024. "Connectivity and spillover during crises: Highlighting the prominent and growing role of green energy," Energy Economics, Elsevier, vol. 129(C).
    19. Man, Yuanyuan & Zhang, Sunpei & He, Yongda, 2024. "Dynamic risk spillover and hedging efficacy of China’s carbon-energy-finance markets: Economic policy uncertainty and investor sentiment non-linear causal effects," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1397-1416.
    20. Wei, Yu & Zhang, Jiahao & Bai, Lan & Wang, Yizhi, 2023. "Connectedness among El Niño-Southern Oscillation, carbon emission allowance, crude oil and renewable energy stock markets: Time- and frequency-domain evidence based on TVP-VAR model," Renewable Energy, Elsevier, vol. 202(C), pages 289-309.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:17:y:2024:i:11:p:2563-:d:1401800. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.