How influential are green energy instruments? We examine how green- and carbon-energy assets differ regarding transmitting and receiving shocks between normal versus crises periods. Crises include the global financial crisis and Euro debt crisis, two waves of COVID-19, and the ongoing Russia-Ukrainian war. Our empirical illustration is based on volatility impulse function (VIRF) for dynamic conditional

This study seeks to explore the impact of corporate environmental responsibility (CER) on idiosyncratic volatility contagion. We first adopt the general dynamic factor model to extract the idiosyncratic volatility. The long-term variance decomposition network is then constructed to examine the contributions of CER the contagion network of idiosyncratic volatility. The results demonstrate that idiosyncratic

This paper assesses the effect of US–China political relationships and geopolitical risks on oil prices. To this end, we consider two quantitative measures, the Political Relationship Index (PRI) and the Geopolitical Risk Index (GPR), and rely on structural VAR and local projection methodologies. Our findings show that improved US–China relationships, as well as higher geopolitical risks, drive up

The literature lacks enough evidence on the effect of environmental policy stringency on renewable energy consumption. Therefore, the main objective of this study is to investigate the causal effect of the revised version of the Environmental Policy Stringency Index (EPS) and its components on Renewable Energy Consumption (REC), taking into account environmental innovation, trade openness, economic

Journal of Political Economy, Ahead of Print.

We structurally estimate an investment-based asset pricing model, in which firms' exposure to macroeconomic risk is unknown. Bayesian beliefs about this parameter are updated from firms' and industry peers' comovement between their productivity and consumption growth. The model implies that discount rates rise endogenously with the perceived risk exposure of firms, thereby depressing investment and

This paper provides empirical evidence on the evolution of the impact of external shocks on the volatility connectedness of Russian oil and gas companies’ stock prices. We examine how the spillover structure has changed following the outbreak of COVID-19, as well as under the impact of the 2022–2023 events. We have extended the Diebold–Yilmaz approach to calculate conditional connectivity measures

Abstract We investigate how different value creation processes affect the early-stage performance of new ventures. Specifically, we focus on entrepreneurial value creation using four different patterns of customer engagement: (1) existing customer acquisition (ECA); (2) product/service imitation (PSI); (3) customer-focused innovation (CFI); and (4) technology-driven innovation (TDI). We examine early-stage

Abstract Transgender persons are subject to strong stigma in society and the labour market. Transgender persons may therefore view self-employment as an opportunity to escape labour market inequalities. However, the rate of transgender self-employment, when compared to equivalent cisgender persons, has not been explored in previous research. Therefore, this article uses a large nationally representative

We present a rational expectations model of credit-driven crises, providing a new perspective to explain why credit booms can lead to severe financial crises and aftermath slow economic recoveries. In our model economy, banks can operate in two types of business. They are sequentially aware of the deterioration of fundamentals of the speculative business and decide whether to continue credit extension

Journal of Political Economy, Ahead of Print.

This paper investigates the effects of real energy price shocks on current account balances of 45 emerging market and developing economies. The investigation is based on country-specific structural vector autoregression models, where alternative specifications and identification schemes are considered for robustness purposes. The empirical results suggest that 1 % of a positive real oil price shock

Tropical forests have a significant impact on rainfall patterns at a continental scale, thereby influencing water supply for energy generation of hydropower plants. I develop a method to value this ecosystem service using an econometric climate model that connects tropical deforestation with rainfall. As an application, I estimate the impact that Amazon deforestation has on the power generation capacity

We study the use and economic impact of AI technologies. We propose a new measure of firm-level AI investments using employee resumes. Our measure reveals a stark increase in AI investments across sectors. AI-investing firms experience higher growth in sales, employment, and market valuations. This growth comes primarily through increased product innovation. Our results are robust to instrumenting

Households tend to hold substantial amounts of non-financial assets in the form of consumer goods inventories that are unobserved by traditional measures of wealth, about $725 on average for products covered by our sample. Such holdings can eclipse total financial assets among households in the lowest income quintile. Households can obtain significant financial returns from strategically shopping and

We assess the degree of connectedness among 16 metals that are critical for the production of clean energy technologies. These commodities are the constituents of the Energy Transition Metals (ETMs) price index maintained by the International Monetary Fund and comprise base, precious, and minor metals. We rely on Vector Autoregressive models and generalised forecast error variance decomposition to

In tropical countries, air conditioners (ACs) account for a significant fraction of energy consumption. We conduct a randomized control trial to examine how people can best be induced to raise their AC temperature by 2?°C over time, to reduce energy consumption. Subjects were randomly assigned to (1) raise the AC temperature gradually, by 1?°C in period 1 and an additional 1?°C in period 2; (2) increase

Unlike development strategies for prosperous regions and their prioritisation of high-tech sectors, alternative strategies for left behind places are suggested that shift to foundational economies, community-based social innovation and well-being. While we support this emphasis, we see a tendency to neglect the role of change agents engaged with research and teaching in high-tech domains for initiating

Using a real-option approach, we study the decision of a private power generator considering investment in a zero-CO2-emissions plant. Specifically, we analyze the investment decision in mutually exclusive technologies under the presence of market uncertainty, for different scenarios and under different policy regimes within each scenario. The scenarios are based on emissions targets, such as net-zero-CO2

This study examines the impact of climate policy uncertainty (CPU) on fossil-based, as well as renewable and low-carbon-based energy markets. Leveraging advanced techniques such as Wavelet Coherence, Quantile Cross-Spectral, and Quantile-on-Quantile analyses, our study uncovers that CPU is a significant driving force for both types of energy assets, though the effect of CPU on energy assets is time-varying

It is essential to examine how carbon trading affects the financial performance of life insurers who offer funding in a challenging dragon-king environment. The primary focus of this study is to evaluate the effects of manufacturing-borrower carbon emissions trading on the insurer's interest margin and insurance stability. To this end, a capped barrier cap option model is developed to capture the manufacturing

We examine theories that take environmental aspects into account to explain exports and imports. They use a ranking of countries and the typical prediction in the case of bilateral trade is that the higher-ranked country (of the two) gains from extra trade whilst the lower-ranked country loses. Gains and losses are expressed in terms of the net emissions embodied in trade. The two best-known theories

There has been a transition to renewable energy sources and the abandonment of fossil sources worldwide. Although many researchers have studied the influence of various factors on the competitiveness of selected national economies, there is little research on the impact of resource prices. Based on World Economic Forum (WEF) data, this study examined the impact of crude oil prices and macroeconomic

Journal of Political Economy, Ahead of Print.

Journal of Political Economy, Ahead of Print.

Academic research relies on exogenous drivers to enhance the accuracy of forecasting oil volatility. Following the relevant literature, this study collects 62 exogenous drivers that reflect the movements of oil demand, oil supply, oil inventory, macroeconomic fundamentals, financial indicators, and measures of uncertainty. Our empirical results indicate that dimension reduction regressions, especially

This study examines the evolution of CO2 emission intensities in the wholesale electricity sector for the National Electricity Market (NEM) in Australia. Using daily data, we examine the impact of demand, changes in the generation mix, as well as the closure of major coal-fired power plants on emission intensities in the four largest regional markets of the NEM. Particular emphasis is also placed on

We show that the performance of the new factor models of Hou et al. (2015) and Fama and French (2015) depends crucially on how their investment factor is constructed. Both models use growth in total assets to measure investment. Their ability to price the cross-section of returns decreases significantly when the investment factor is constructed using traditional investment measures, or measures that

Repo markets are an important first stage of monetary policy transmission. In the European repo market, the majority of participants, including non-dealer banks and non-banks, do not have access to centralized trading platforms. Rather, they rely on OTC intermediation by a small number of dealers that exert significant market power. Dealer market power causes the passthrough of the ECB's policy rate

Fluctuations in energy prices impact production costs and inflation. This study examines whether inflation data can predict volatility in energy markets. Both inflation and energy market volatility exhibit complex behaviour over time, including structural shifts due to demand and supply shocks. Accounting for differences in data frequencies, we use an extended GARCH model (MIDAS) with Laguerre polynomials

Journal of Political Economy, Ahead of Print.

Journal of Political Economy, Volume 131, Issue 11, November 2023.

Journal of Political Economy, Volume 131, Issue 11, Page 3265-3265, November 2023.

Journal of Political Economy, Volume 131, Issue 11, November 2023.

Left-behind places face linked economic and political problems that must be resolved jointly. This paper examines the potential contribution of basic income programs to that goal. Consisting of regular, no-strings-attached payments to citizens, basic income programs ensure resources and stability for poor and economically precarious households who comprise a significant share of left-behind places’

In most international energy trades, the US dollar is the invoicing currency. Our empirical and theoretical analysis examines how this affects inflation dynamics in energy trade. Empirical results reveal that countries’ with higher shares of trade invoiced in dollars would experience more inflation in their energy sector, primarily because of exchange rate fluctuations. Theoretical modeling, based

This paper examines the connectedness of clean energy with technology, substitutes (crude oil and natural gas), and raw materials (silver, platinum, copper, corn, and soybean). This is conducted from a systemic perspective, using the quantile time–frequency connectedness approach. The results reveal that clean energy and technology stocks demonstrate the strongest pairwise connectedness across all

Extreme weather anomalies, energy crisis and environmental degradation have garnered significant attention in the context of sustainable development. This paper analyses the spillovers among climate policy uncertainty (CPU), energy prices, green bond index, and carbon emission trading price with quantile connectedness approach. The results suggest that connectedness among variables is higher at the

This paper theoretically and empirically investigates the effects of liquidity regulation on the banking system. We document that the current quantity-based liquidity rule has reduced banks' liquidity risks. However, the mandated liquidity buffer appears to crowd out bank lending and lead to a migration of liquidity risks to banks that are not subject to liquidity regulation. These findings motivate

Renewable energy infrastructure development is seen as critical to solving environmental issues. Nevertheless, researchers have not adequately paid attention to how the socioeconomic and geopolitical environment affects renewable energy investments (REINV), which are important for promoting clean energy. In line with this gap, this research aims to analyze the role of economic policy uncertainty (EPU)

This paper analyses the steady-state industry configuration of an oligopoly composed of profit-seeking (PS) and environmentally socially responsible (ECSR) firms in an evolutionary setting. Within this industry, an emission tax is levied, and firms may invest in emission abatement technology to reduce the tax burden. Our main findings show that, despite the commitment towards emission abatement, an

This paper empirically studies the financial performance of energy asset allocation strategies under green and brown preferences. We assume that green investors and traditional or brown energy investors behave differently in their investment decisions. Thus, our optimal portfolio choice is developed in several steps for each energy investor profile and for each monthly rebalancing period. First, energy

Using an original panel data set for 24 OECD countries over the sample 1990-2019 and a multivariate empirical macroeconomic framework for business cycle analysis, the paper tests the combined macroeconomic effects of climate change, environmental policies and green innovation. Overall, we find evidence of significant macroeconomic effects over the business cycle: physical risks act as negative demand

Journal of Political Economy, Ahead of Print.

Drivers of real oil prices have been explored extensively in the literature with little consensus. Using a new identification scheme based on forecast error variance, we identify oil-specific demand, demand, and oil supply shocks that maximize the sum of forecast error variance of three variables explained by their respective shocks. The estimation, with the sample period until 2007, suggests that

With increasing shares of renewable energy generation, the evolution of reserve needs may represent an important challenge for the power system. The evolution of reserve capacity needs in this context has been extensively studied in the literature (Hirth and Ziegenhagen, 2015). On the other hand, reserve energy needs have been less studied. This work focuses on analysing the relationship between reserve

Although many current studies have explored a series of factors influencing environmental quality, few have investigated the nonlinearity between information and communication technology (ICT) and the environment. This article uses the method of moments quantile regression (MM-QR) technique to evaluate the nonlinear and heterogeneous effects of all influencing factors on carbon dioxide emissions under

We analyze how different types of oil shocks impact the prices of six meat commodities: beef, lamb, pork, poultry, fish, and shrimp. Proceeding in two stages, we first decompose variations in the real oil price into oil supply, aggregate demand, and oil-specific demand shocks using a recursive structural vector autoregression. Then, we examine the asymmetries in the effects of these three types of

According to the International Organization of Motor Vehicle Manufacturers (OICA), Automobile manufacturers use 40% of steel to make the body structure, 23% to make engines and gears, and 12% for suspensions. We untangled the perceived inextricable connections between crude oil, steel, the US dollar, and stocks of Toyota, Daimler, and Volkswagen as the automobile firms with the largest capitalization

This paper argues that money and finance are not sufficiently integrated into the research agenda of evolutionary economic geography (EEG). I identify two dimensions of Joseph Schumpeter’s vision of the inherent instability of capitalism as promising for the EEG research agenda: First, the ‘law’ (Gesetz) of a disequilibrating role of credit creation and innovations in financial relations reveals the

Operating a highly decarbonized power system is technically complex and introduces novel challenges for system operators. To this effect, the hourly day-ahead market schedule must be compliant with all the network security criteria. If required, specific generators should be curtailed or started up after the market clearing via so-called redispatching actions. In this paper, we analyze the bias in

Drawing on strategic management theory, this study examines the relationship between digitalization and innovation performance in small and medium-sized enterprises (SMEs). We hypothesize that SMEs with higher levels of digital diffusion have higher innovation performance, and that absorptive capacity moderates this relationship. To test this relationship, we use a sample of 1100 German SMEs from the

Fostering cooperation among local stakeholders is a core aim of place-based policies, and it can generate economic benefits and help restore a sense of agency in left-behind communities. However, relatively little is known about how to induce local cooperation in low-trust, institutionally weak areas. This article develops an integrated theoretical framework to help diagnose the precise obstacles to