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Green Car Manufacturing and Stock Market Performance

Author

Listed:
  • Collins C Ngwakwe

    (University of Limpopo)

  • Joseph Musandiwa

    (University of Limpopo)

Abstract

The quest for sustainable economic development alternatives is revolutionising the automobile industry toward a more economic and sustainable products. This paper examines the relationship between green (electric) vehicle products and stock market performance. The prior work inclination is on the innovation and diffusion theories, which provides a lens to examine green innovation in auto industry. The paper adopts a fusion of review and quantitative approach. Data were from the International Energy Agency and Investing databases. A fixed effect panel analysis examine how the stock market reacts to two main types of electric vehicles – the Battery Electric Vehicle (BEV) and Plug-in Hybrid Electric Vehicle (PHEV). The result adds to new knowledge namely, the BEV product relates to the stock market significantly at P=0.00002 but negatively. However, the PHEV has a positive and significant relationship with the stock market at a P=0.00001. The results offer practical implications including inter alia, manufacturers’ introduction of more PHEV products into the consumer market has a high propensity to improve the stock market performance; this provides a useful information for stock market analysis and auto industry strategic planning. It also offers a good innovation case material for business schools. This paper contributes the first modelling of two main types of green car on stock market performance.

Suggested Citation

  • Collins C Ngwakwe & Joseph Musandiwa, 2022. "Green Car Manufacturing and Stock Market Performance," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 18(2), pages 65-76, April.
    • Handle: RePEc:dug:actaec:y:2022:i:2:p:65-76
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