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Green financing, financial uncertainty, geopolitical risk, and oil prices volatility

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  • Wang, Fanyi
  • Ma, Wanying
  • Mirza, Nawazish
  • Altuntaş, Mehmet

Abstract

This research explores the correlation between green investment, geopolitical risk, financial uncertainty, oil price volatility, and green bond investment globally from 1985 to 2020. We analyze long-term and short-term associations among the variables using the Quantile Autoregressive Distributed Lagged (QARDL) model. The QARDL model confirms a long-term relationship between the key variables and green investment. The error correction parameter indicates that financial stress and geopolitical risk negatively impact green investment. In contrast, oil price volatility and clean energy investments positively influence green investment. The Wald test affirms parameter constancy in both the short and long run. However, the study only considers four green bond investment trend determinants and lacks cross-country or regional comparisons. The findings provide insights into the interplay between the study variables and highlight the need for future research to consider broader determinants and include cross-regional comparisons for a comprehensive understanding of green bond investment trends.

Suggested Citation

  • Wang, Fanyi & Ma, Wanying & Mirza, Nawazish & Altuntaş, Mehmet, 2023. "Green financing, financial uncertainty, geopolitical risk, and oil prices volatility," Resources Policy, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:jrpoli:v:83:y:2023:i:c:s0301420723004270
    DOI: 10.1016/j.resourpol.2023.103716
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