Do Climate Stock and Low-Carbon Stock Respond to Oil Prices and Energy Stocks During an Oil Crisis? Implications for Sustainable Development

Minh Thi Hong Dinh ()
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Minh Thi Hong Dinh: Department of Business Administration, Inland School of Business and Social Sciences, University of Inland Norway, Postboks 400, 2418 Elverum, Norway

IJFS, 2025, vol. 13, issue 3, 1-16

Abstract: This research investigates the responsiveness of climate and low-carbon (green) stock returns to oil prices and conventional energy stock returns, focusing on both contemporaneous and causal relationships, during an oil crisis. Two methodologies are used: vector auto-regressive (VAR) for testing the causal relationship, and ordinary least squares (OLS) for investigating the contemporaneous relationship. The main empirical results suggest that green stocks have a bidirectional positive contemporaneous relationship with oil prices and energy stock returns but no significant bidirectional causal relationship. The results reveal that oil prices and energy stock returns play a larger role in contemporaneous than causal relationships with green stock returns. In addition, green stock returns seem to have a stronger positive relationship with energy stock return than oil prices.

Keywords: green equities; oil price shocks; traditional energy stocks; VAR; causal inference; contemporaneous relationship; climate and low-carbon stocks (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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