COVID−19 and oil price risk exposure

Akhtaruzzaman, Md; Boubaker, Sabri; Chiah, Mardy; Zhong, Angel

doi:10.1016/j.frl.2020.101882

Cited by 123 publications

(49 citation statements)

References 44 publications

(47 reference statements)

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“…The MSCI Global Alternative Energy Index stays for most of its time in the low-volatility regime 2 without being adversely and significantly affected by the COVID-19-related indicators and only once switches to the high-volatility regime 1. Our results correspond to Akhtaruzzaman et al [42] and Corbet et al [44]. Moreover, the results are consistent with the IEA Global Energy Review 2020 [41], which showed that the COVID-19 pandemic did not hamper the alternative energy industry in comparison to the conventional energy sector, and renewable energy sources are the most Covid-19 resilient.…”

Section: Resultssupporting

confidence: 92%

“…According to IEA [41], renewable energy would still increase, making renewable energy sources the most Covid-19 resilient. Akhtaruzzaman et al [42] claim that oil-substitute industries, i.e., alternative energy, alternative fuels, and alternative energy equipment and infrastructure, have positive exposure to oil price risk, and the level of a vulnerability is much lower than those of oil supply and infrastructure provider industries. The evidence shows that investment in solar and wind energy has not stopped growing through the last oil price mitigation in 2020 as most investment funding in renewables come from outside the conventional energy sector [43].…”

Section: Introductionmentioning

confidence: 99%

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Is the Alternative Energy Sector COVID-19 Resistant? Comparison with the Conventional Energy Sector: Markov-Switching Model Analysis of Stock Market Indices of Energy Companies

Czech

Wielechowski

2021

Energies

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The outbreak and rapid spread of the COVID-19 pandemic has hit the global financial markets, including the energy sector. Alternative energy belongs to the economy’s key sectors concerning environmental issues and seems to be a full-fledged alternative for fossil-based conventional energy. This paper aims to assess the impact of COVID-19 on the stock market indices related to the alternative and conventional energy sector. We use daily data on the Morgan Stanley Capital International (MSCI) Global Alternative Energy Index, the MSCI All Country World Index (ACWI) Energy Index, and self-developed Average-49 COVID-19 New Cases Index and Average-49 Stringency Index. The research covers the period January–October 2020. The average level of the MSCI Global Alternative Energy Index in COVID-19 year was more than a quarter higher than in 2019 while the MSCI ACWI Energy fell almost one-third in the same period. Based on the Markov-switching model, we show that both the MSCI Global Alternative Energy and the MSCI ACWI Energy are not significantly affected by the epidemic status. The analysed indices decline as the government anti-COVID-19 policy becomes more stringent, but the relationship is statistically significant only in the high-volatility regime. In comparison to the conventional energy index, we reveal that the alternative energy index stays most of its time in the low-volatility regime without being adversely and significantly affected by the COVID-19 related indicators. Our study shows that the alternative energy sector, represented by the MSCI Global Alternative Energy Index, seems to be more resistant to COVID-19 than the conventional energy sector. It might imply that the novel coronavirus pandemic has not depreciated but emphasised the growing concern about climate change and environmental pollution.

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Section: Resultssupporting

confidence: 92%

Section: Introductionmentioning

confidence: 99%

Is the Alternative Energy Sector COVID-19 Resistant? Comparison with the Conventional Energy Sector: Markov-Switching Model Analysis of Stock Market Indices of Energy Companies

Czech

Wielechowski

2021

Energies

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“…Regulators have postponed or lifted bans, prohibited consumers from using reusable items (Tenenbaum, 2020), and interrupted recycling services to prevent crosscontamination (Leonard & Mallos, 2020). At the same time, energy demand has plummeted in many sectors, shortly followed by commodity pricesmaking petroleum-based virgin plastic even less expensive (Chaudhuri, 2020;Nyga-Lukaszewska, 2020;Akhtaruzzaman, 2021). While the exact impacts are difficult to quantify as the COVID-19 pandemic is ongoing, the implications are sure to be felt for decades to come.…”

Section: Introductionmentioning

confidence: 99%

Cognitive Decision-Making Algorithms in Data-driven Retail Intelligence: Consumer Sentiments, Choices, and Shopping Behaviors

2022

J. Self-Gov. Manag. Econ.

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The ongoing COVID-19 pandemic is upending our lives and the global economy in ways unimaginable until recently. While the overall impacts are still difficult to quantify, ramifications are sure to be felt for decades to come. Providing secure, reliable, and affordable resources for all without causing devastating environmental consequences is perhaps the greatest challenge of the 21st century. But the pandemic has significantly altered dynamics and changed priorities. How is this impacting the quest for sustainability? This paper analyzes these challenges by focusing on the plastic industry. There is no doubt that plastic has molded society in many ways that make our lives easier and safer, but it has also created a global environmental and sustainability crisis. To curb our addiction to plastic, the world had been trying to move away from virgin plastic, but the pandemic has turned an enemy into a much-needed ally. The following paper uses a mixed-methods approach of surveys, empirical analysis, and literature review to answer a fundamental question: How can we leverage the advantages of plastic without contributing to the world's environmental crisis? This dilemma poses a significant challenge but also opens an opportunity to address sustainability at a systemic level through circularity and the transition to low-carbon alternatives to petroleum-based plastics.

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“…[ 3 ] As to the oil market, the volatility of oil price increased following the commencement of COVID‐19 [ 4 ] and financial industries responded negatively to positive oil price shocks. [ 5 ] During the pandemic, both oil and stock markets may encounter stronger impacts of their own and cross shocks. [ 6 ] At the firm level, the Covid‐19 pandemic provides enterprises the opportunity to undertake more authentic and genuine CSR [ 7 ] and relevant activities can help hospitality companies enhance their stock returns and gain stakeholders’ attention during the pandemic.…”

Section: Introductionmentioning

confidence: 99%

Contagion in Global Stock Markets during the COVID‐19 Crisis

Liu

Wei

2021

Global Challenges

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The impact of the coronavirus disease (COVID‐19) outbreak on global stock markets is investigated by analyzing the impact of the COVID‐19 pandemic on the stock markets of 15 countries selected from Asia, Europe, Latin America, and North America. Using extremal dependence tests of contagion, it is found that contagion effects are widespread to global equity markets in four regions. Latin America and North America are highly exposed to contagion risks, followed by Europe, with Asia being least vulnerable. Based on the time window of the crisis severity index, it is found that Latin America is most likely to be affected. The results confirm that for countries with more severe epidemics, there are stronger contagion effects. Therefore, for the governing authorities of various countries, if they want to prevent the contagion of financial crises during the pandemic, strong and timely epidemic prevention measures are very necessary.

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COVID−19 and oil price risk exposure

Cited by 123 publications

References 44 publications

Is the Alternative Energy Sector COVID-19 Resistant? Comparison with the Conventional Energy Sector: Markov-Switching Model Analysis of Stock Market Indices of Energy Companies

Is the Alternative Energy Sector COVID-19 Resistant? Comparison with the Conventional Energy Sector: Markov-Switching Model Analysis of Stock Market Indices of Energy Companies

Cognitive Decision-Making Algorithms in Data-driven Retail Intelligence: Consumer Sentiments, Choices, and Shopping Behaviors

Contagion in Global Stock Markets during the COVID‐19 Crisis

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