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Global Climate Policy Uncertainty and Stock Returns: Empirical Evidence from BIST Sectoral Indices

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  • Mehmetcan Suyadal

Abstract

This study examines the impact of Global Climate Policy Uncertainty (GCPU) on stock market returns in Türkiye at the sectoral level. To this end, the study employs the weekly GCPU Index proposed by Ma et al. (2024) and data for the Borsa Istanbul stock indices covering the period 2000–2023. Quantile regression results reveal not only the extent to which sectors are affected by the global index, but also how climate policy uncertainty influences returns across different market conditions. GCPU exerts a positive and significant effect on energy-intensive electricity sector shares across most market states, whereas the same results emerge in other sectors under different market states. In technology shares, GCPU generates positive effects in lower quantiles (bearish market conditions), while in the chemical, financial, and industrial sectors, such effects emerge in higher quantiles (bullish market conditions). On the other hand, positive and significant relationships are found in the basic metal sector at the top quantile, while similar effects are seen for the services sector at the lowest quantile and middle quantiles. Overall, the results are expected to provide valuable insights for global and local climate-related regulators as well as investors and researchers.

Suggested Citation

  • Mehmetcan Suyadal, 2025. "Global Climate Policy Uncertainty and Stock Returns: Empirical Evidence from BIST Sectoral Indices," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 10(SI), pages 216-234.
    • Handle: RePEc:ahs:journl:v:10:y:2025:i:si:p:216-234
    DOI: 10.30784/epfad.1813815
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    References listed on IDEAS

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    1. Iqbal, Najaf & Bouri, Elie & Shahzad, Syed Jawad Hussain & Alsagr, Naif, 2024. "Asymmetric impacts of Chinese climate policy uncertainty on Chinese asset prices," Energy Economics, Elsevier, vol. 133(C).
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    Keywords

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    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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