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Dynamic Linkage Between Oil Price and Alternative Energy Stocks: A VAR Analysis

In: Proceedings of the 3rd International Conference on Artificial Intelligence in Economics, Finance and Management (ICAIEFM 2025)

Author

Listed:
  • Shafeena Ali

    (Sanatana Dharma College, PhD Research Scholar, Department of Commerce)

  • Krishnan Mahadevan

    (Sanatana Dharma College, Assistant Professor, Department of Commerce)

Abstract

This study investigates the dynamic linkage between crude oil prices and renewable energy stock prices in India, while controlling for technological advancements and interest rates. The Vector Autoregressive (VAR) model for weekly data from 2018 to 2024 captures both short and long-run interactions. The results show that oil price shocks initially push renewable energy stock prices higher through the substitution effect, but the impact is short-lived. In contrast, technology shocks apply a stronger and continuous positive influence. At the same time, higher interest rates temporarily depress the prices of renewable energy and technology stocks before the effects weaken over time. Overall, the findings suggest that although oil market fluctuations shape short-term dynamics, technological progress and supportive financing conditions play a more decisive role in sustaining India’s energy transition.

Suggested Citation

  • Shafeena Ali & Krishnan Mahadevan, 2025. "Dynamic Linkage Between Oil Price and Alternative Energy Stocks: A VAR Analysis," Advances in Economics, Business and Management Research, in: Bejoy Joseph & Devi Sekhar R (ed.), Proceedings of the 3rd International Conference on Artificial Intelligence in Economics, Finance and Management (ICAIEFM 2025), pages 156-172, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-896-7_9
    DOI: 10.2991/978-94-6463-896-7_9
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