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The Impact of International Oil Prices on the Stock Price Fluctuations of China’s Renewable Energy Enterprises

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  • Cody Yu-Ling Hsiao

    (Department of Accounting and Finance, School of Business, Macau University of Science and Technology, Macau 999078, China)

  • Weishun Lin

    (Department of Accounting and Finance, School of Business, Macau University of Science and Technology, Macau 999078, China)

  • Xinyang Wei

    (Department of Accounting and Finance, School of Business, Macau University of Science and Technology, Macau 999078, China)

  • Gaoyun Yan

    (Centre of Excellence in Population Ageing Research, University of New South Wales, Sydney, NSW 2052, Australia)

  • Siqi Li

    (Department of Accounting and Finance, School of Business, Macau University of Science and Technology, Macau 999078, China)

  • Ni Sheng

    (Department of Accounting and Finance, School of Business, Macau University of Science and Technology, Macau 999078, China)

Abstract

In order to address a series of issues, including energy security, global warming, and environmental protection, China has ranked first in global renewable investment for the seventh consecutive year. However, developing a renewable energy industry requires a significant capital investment. Also, the international oil price fluctuations have an important impact on the stock prices of renewable energy firms. Thus, in order to provide implications for market investment as well as policy recommendations, this paper studied the spillover effect of international oil prices on the stock prices of China’s renewable energy listed companies. We used a Vector Autoregressive (VAR) model with innovations using a Factor-GARCH (Generalized Autoregressive Conditional Heteroskedasticity) process to evaluate the impact of market co-movements and time-varying volatility and correlation between the international oil price and China’s renewable energy market. The results show that the international oil price has a significant price spillover effect on the stock prices of China’s renewable energy listed companies. Moreover, the fluctuations of international oil prices have an influence on the stock price variations of Chinese renewable energy listed companies.

Suggested Citation

  • Cody Yu-Ling Hsiao & Weishun Lin & Xinyang Wei & Gaoyun Yan & Siqi Li & Ni Sheng, 2019. "The Impact of International Oil Prices on the Stock Price Fluctuations of China’s Renewable Energy Enterprises," Energies, MDPI, vol. 12(24), pages 1-17, December.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:24:p:4630-:d:294742
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    References listed on IDEAS

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