Natural resources and green economic recovery in responsible investments: Role of ESG in context of Islamic sustainable investments

Fei Zou, Lingyu Huang, Mahdi Ghaemi Asl, Mohammad Delnavaz and Sunil Tiwari

Resources Policy, 2023, vol. 86, issue PA

Abstract: This study investigates the dynamic interactions between fossil fuel-free, ESG, and carbon-efficient investments and government stimulus in Europe before and after COVID-19. Using time-varying analysis, results show ESG investments benefited most from stimulus packages when looking at average performance. However, separating pre- and post-pandemic periods revealed more nuanced results. Pre-COVID, least-volatile carbon-efficient companies spilled over to stimulus beneficiaries, but post-COVID they benefitted from them. Islamic-screened sustainable investments were net receivers regardless of period. In contrast, conventional ESG and fossil fuel-free industries behaved oppositely to low-risk eco-friendly firms, transmitting benefits to stimulus recipients. Causality tests confirmed spillover analysis, showing nonlinear causality from stimulus recipients to Islamic investments across conditions and low-risk climate-conscious investments at lower quantiles. In summary, this study provides new perspectives on chain reactions between government-supported firms and purpose-driven enterprises, helping recovery planners and policymakers make more informed sustainable investment decisions.

Keywords: Recovery plan; Fiscal stimulus packages; Responsible investments; Least-volatile stocks; ESG (search for similar items in EconPapers)
JEL-codes: E62 H32 O13 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:86:y:2023:i:pa:s0301420723009066

DOI: 10.1016/j.resourpol.2023.104195

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