Does renewable energy index respond to the pandemic uncertainty?

Wael Hemrit and Noureddine Benlagha ()

Renewable Energy, 2021, vol. 177, issue C, 336-347

Abstract: Unlike very recent studies examining the most widely traded commodities (such as; oil and gold) under an overwhelming time pressure and amid high pandemic uncertainty, the effects of world pandemic and economic policy uncertainties along with price movements in common traditional asset classes on the renewable energy index are investigated. The empirical evidence is based on daily data covering the period from January 3, 2005 to June 30, 2020. The results from quantile regression show significant positive effects of the pandemic uncertainty on renewable energy index. In contrast, the empirical findings reveal negative effect of the economic policy uncertainty on the renewable energy index, particularly, in lower quantiles. Accordingly, the results indicate that the effect of the economic policy uncertainty is reversed as the quantiles increase. The study's practical applications are unique and have policy implications; for instance, suitable policies could convert the threats of pandemic uncertainty to great opportunities for renewable energy markets and ultimately, investors not only explore the scope for hedging the oil price risk, but they can reap further portfolio diversification benefits by investing in renewable energy stocks.

Keywords: Renewable energy index; World pandemic uncertainty index; Economic policy uncertainty; Commodities; Quantile (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:177:y:2021:i:c:p:336-347

DOI: 10.1016/j.renene.2021.05.130

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