IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v86y2023ipas0301420723008826.html
   My bibliography  Save this article

Examining the interplay of green bonds and fossil fuel markets: The influence of investor sentiments

Author

Listed:
  • Huang, Leping
  • Zhang, Kuo
  • Wang, Jingxin
  • Zhu, Yingfu

Abstract

This study delves into the impact of investor sentiment and the issuance of green bonds on fossil fuel consumption, specifically focusing on three key fossil fuels: crude oil, coal, and natural gas, using data spanning from 2015 to 2022 and concentrating on the top ten environmentally conscious nations globally. The findings reveal that a mere 1% increase in green bond issuance volume correlates with reductions of 0.12%, 0.49%, and 0.09% in crude oil, coal, and natural gas consumption, respectively. Additionally, a 1% enhancement in the investor sentiment index corresponds to decreases in consumption rates of 0.26%, 0.39%, and 0.01% for the same fossil fuels. Furthermore, the presence of a higher number of registered patents significantly contributes to the reduction of coal and crude oil consumption, highlighting the importance of innovation in sustainability efforts. In light of these findings, practical policy recommendations for nations emerge, including the development of robust green bond markets and the promotion of sustainability education. Encouraging sustainable electricity production through private sector involvement and local green initiatives is also advocated.

Suggested Citation

  • Huang, Leping & Zhang, Kuo & Wang, Jingxin & Zhu, Yingfu, 2023. "Examining the interplay of green bonds and fossil fuel markets: The influence of investor sentiments," Resources Policy, Elsevier, vol. 86(PA).
  • Handle: RePEc:eee:jrpoli:v:86:y:2023:i:pa:s0301420723008826
    DOI: 10.1016/j.resourpol.2023.104171
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723008826
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.resourpol.2023.104171?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Henderson, Kirsten & Loreau, Michel, 2023. "A model of Sustainable Development Goals: Challenges and opportunities in promoting human well-being and environmental sustainability," Ecological Modelling, Elsevier, vol. 475(C).
    2. Kibria, Ahsan & Akhundjanov, Sherzod B. & Oladi, Reza, 2019. "Fossil fuel share in the energy mix and economic growth," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 253-264.
    3. Cicchiello, Antonella Francesca & Cotugno, Matteo & Monferrà, Stefano & Perdichizzi, Salvatore, 2022. "Which are the factors influencing green bonds issuance? Evidence from the European bonds market," Finance Research Letters, Elsevier, vol. 50(C).
    4. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    5. Tang, Dragon Yongjun & Zhang, Yupu, 2020. "Do shareholders benefit from green bonds?," Journal of Corporate Finance, Elsevier, vol. 61(C).
    6. Barreto, Raul A., 2018. "Fossil fuels, alternative energy and economic growth," Economic Modelling, Elsevier, vol. 75(C), pages 196-220.
    7. Santi, Caterina, 2023. "Investor climate sentiment and financial markets," International Review of Financial Analysis, Elsevier, vol. 86(C).
    8. Piñeiro-Chousa, Juan & López-Cabarcos, M.Ángeles & Caby, Jérôme & Šević, Aleksandar, 2021. "The influence of investor sentiment on the green bond market," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    9. Pesaran, M. Hashem & Vanessa Smith, L. & Yamagata, Takashi, 2013. "Panel unit root tests in the presence of a multifactor error structure," Journal of Econometrics, Elsevier, vol. 175(2), pages 94-115.
    10. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    11. Hashem Pesaran, M. & Yamagata, Takashi, 2008. "Testing slope homogeneity in large panels," Journal of Econometrics, Elsevier, vol. 142(1), pages 50-93, January.
    12. van Eyden, Reneé & Gupta, Rangan & Nielsen, Joshua & Bouri, Elie, 2023. "Investor sentiment and multi-scale positive and negative stock market bubbles in a panel of G7 countries," Journal of Behavioral and Experimental Finance, Elsevier, vol. 38(C).
    13. Zhao, Linhai & Rasoulinezhad, Ehsan, 2023. "Role of natural resources utilization efficiency in achieving green economic recovery: Evidence from BRICS countries," Resources Policy, Elsevier, vol. 80(C).
    14. Ren, Xiaohang & Zhong, Yan & Cheng, Xu & Yan, Cheng & Gozgor, Giray, 2023. "Does carbon price uncertainty affect stock price crash risk? Evidence from China," Energy Economics, Elsevier, vol. 122(C).
    15. Duan, Kun & Ren, Xiaohang & Wen, Fenghua & Chen, Jinyu, 2023. "Evolution of the information transmission between Chinese and international oil markets: A quantile-based framework," Journal of Commodity Markets, Elsevier, vol. 29(C).
    16. Yu, Haixu & Liang, Chuanyu & Liu, Zhaohua & Wang, He, 2023. "News-based ESG sentiment and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 88(C).
    17. Juan Piñeiro-Chousa & M.Ángeles López-Cabarcos & Jérôme Caby & Aleksandar Šević, 2021. "The influence of investor sentiment on the green bond market," Post-Print hal-02960892, HAL.
    18. Gao, Yang & Zhao, Chengjie, 2023. "Investor sentiment and stock price jumps: A network analysis based on China’s carbon–neutral sectors," The North American Journal of Economics and Finance, Elsevier, vol. 68(C).
    19. Ye, Xiang & Rasoulinezhad, Ehsan, 2023. "Assessment of impacts of green bonds on renewable energy utilization efficiency," Renewable Energy, Elsevier, vol. 202(C), pages 626-633.
    20. Baz, Khan & Xu, Deyi & Cheng, Jinhua & Zhu, Yongguang & Huaping, Sun & Ali, Hashmat & Abbas, Khizar & Ali, Imad, 2022. "Effect of mineral resource complexity and fossil fuel consumption on economic growth: A new study based on the product complexity index from emerging Asian economies," Energy, Elsevier, vol. 261(PB).
    21. Shen, Yiran & Liu, Chang & Sun, Xiaolei & Guo, Kun, 2023. "Investor sentiment and the Chinese new energy stock market: A risk–return perspective," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 395-408.
    22. Linhai Zhao & Ehsan Rasoulinezhad, 2023. "How Has The Coronavirus Outbreak Affected Economic Poverty In Different Asian Regions?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(04), pages 1091-1113, June.
    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. Wang, Chuangang & Li, Xin, 2024. "Optimizing the utilization of mineral assets and human resources for enhanced social welfare and sustainable development," Resources Policy, Elsevier, vol. 90(C).
    2. Xu, Jiaqi & Zhao, Jingfeng & Liu, Wen, 2023. "A comparative study of renewable and fossil fuels energy impacts on green development in Asian countries with divergent income inequality," Resources Policy, Elsevier, vol. 85(PA).
    3. Liu, Xiaoxia & Yang, Ming & Shao, Zongyuan & Liu, Liyan & Gu, Weiyu, 2024. "Assessment of impacts of mineral raw material resource efficiency on enterprise performance," Resources Policy, Elsevier, vol. 90(C).
    4. Yiping Zheng & Qinyu Xu & Qianrong Wang, 2024. "RETRACTED ARTICLE: How is energy transition shaping a path to common prosperity and sustainable economic growth?," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-16, April.
    5. Ma, Xuewen & Zhang, Dongming, 2023. "Digitalization of the economy for fossil fuels efficiency and carbon neutrality," Resources Policy, Elsevier, vol. 86(PA).
    6. Peng, Shuyue & Jia, Ruoya & Wang, Qianrong & Li, Tongxin & Zhang, Congcong, 2023. "Role of city sustainability in utilizing the natural resources," Resources Policy, Elsevier, vol. 86(PB).
    7. Zhou, Hailing & Liu, Ji, 2023. "Digitalization of the economy and resource efficiency for meeting the ESG goals," Resources Policy, Elsevier, vol. 86(PA).
    8. Li, Liang & Chen, Yifu, 2024. "The impact of intellectual property protection on the performance of fossil fuel extraction and production companies in developing countries," Resources Policy, Elsevier, vol. 89(C).
    9. Chunyang Wang & Qianqian He & Jian Xu, 2024. "Exploring the role of quality and inclusive education in meeting sustainable development goals," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-15, June.
    10. Khan, Zeeshan & Hossain, Mohammad Razib & Badeeb, Ramez Abubakr & Zhang, Changyong, 2023. "Aggregate and disaggregate impact of natural resources on economic performance: Role of green growth and human capital," Resources Policy, Elsevier, vol. 80(C).
    11. Al Mamun, Md & Boubaker, Sabri & Hossain, Md Zakir & Manita, Riadh, 2024. "Female political empowerment and green finance," Energy Economics, Elsevier, vol. 131(C).
    12. Li, Yunfa & Liu, Fawei, 2023. "Assessment of impacts of land and electricity prices on mineral efficiency," Resources Policy, Elsevier, vol. 86(PB).
    13. Xiangbin Zuo & Huanhuan Ding, 2024. "RETRACTED ARTICLE: Green energy adoption in ASEAN+6 countries: policy and legal insights for sustainable development," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-16, April.
    14. Liu, Biao & Lyu, Yifei, 2024. "Economic corruption, green recovery, and mineral trade relationships in emerging economies," Resources Policy, Elsevier, vol. 90(C).
    15. Xiangyu Du & Wuyang Xie & Weimin Guan, 2024. "RETRACTED ARTICLE: Energy transition in sport and public facilities: pioneering sustainable economic pathways," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-16, April.
    16. Ma, Xuewen & Liu, Liyan & Zhang, Dongming, 2024. "How green finance tools and electric vehicles minerals sustainability are related?," Resources Policy, Elsevier, vol. 90(C).
    17. Ai, Weina & Dong, Weiwei & Liu, Yajie, 2024. "Connecting ferrous metal extraction, sustainable urban development, and resource management in diverse economies," Resources Policy, Elsevier, vol. 90(C).
    18. Sun, Weiqing & Shao, Mingqi & Yang, Dongqing, 2024. "Role of essential minerals in achieving low-carbon economy and sustainability," Resources Policy, Elsevier, vol. 90(C).
    19. Lu, Man & Zhao, Yue, 2024. "Mineral resource extraction and environmental sustainability for green recovery," Resources Policy, Elsevier, vol. 90(C).
    20. Li, Xiang & Tong, Xiuyu, 2024. "Fostering green growth in Asian developing economies: The role of good governance in mitigating the resource curse," Resources Policy, Elsevier, vol. 90(C).

    More about this item

    Keywords

    Fossil fuels consumption; Green bonds; Investor sentiment; Panel data;
    All these keywords.

    JEL classification:

    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

    Statistics

    Access and download statistics

    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:eee:jrpoli:v:86:y:2023:i:pa:s0301420723008826. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    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.