Global Climate Policy Uncertainty and Stock Returns: Empirical Evidence from BIST Sectoral Indices

Mehmetcan Suyadal

Journal of Research in Economics, Politics & Finance, 2025, vol. 10, issue SI, 216-234

Abstract: This study examines the impact of Global Climate Policy Uncertainty (GCPU) on stock market returns in Türkiye at the sectoral level. To this end, the study employs the weekly GCPU Index proposed by Ma et al. (2024) and data for the Borsa Istanbul stock indices covering the period 2000–2023. Quantile regression results reveal not only the extent to which sectors are affected by the global index, but also how climate policy uncertainty influences returns across different market conditions. GCPU exerts a positive and significant effect on energy-intensive electricity sector shares across most market states, whereas the same results emerge in other sectors under different market states. In technology shares, GCPU generates positive effects in lower quantiles (bearish market conditions), while in the chemical, financial, and industrial sectors, such effects emerge in higher quantiles (bullish market conditions). On the other hand, positive and significant relationships are found in the basic metal sector at the top quantile, while similar effects are seen for the services sector at the lowest quantile and middle quantiles. Overall, the results are expected to provide valuable insights for global and local climate-related regulators as well as investors and researchers.

Keywords: Global Climate Policy Uncertainty; Stock Markets; Quantile Regression (search for similar items in EconPapers)
JEL-codes: D53 G11 Q54 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ahs:journl:v:10:y:2025:i:si:p:216-234

DOI: 10.30784/epfad.1813815

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