On the relationship between oil market and European stock returns
Cosimo Magazzino,
Muhammad Shahbaz,
Massimiliano Adamo
Abstract:This paper investigates the dynamic relationship between the oil market and European stock market returns using monthly data from May 2007 to April 2022 for 27 European Union member countries. A novel approach is adopted by using the time-varying Granger causality test and the structural vector auto-regression model to examine the causal links. Empirical results reveal strong evidence of time-varying causation between the variables, considering the oil market from both the supply-side and demand-side perspecti… Show more
The shadow economy, natural resources, and economic globalization are interconnected factors that shape global carbon emissions. Developing effective strategies to mitigate climate change and achieve sustainable development requires understanding the interplay between these factors. This study examines the impact of the shadow economy, natural resource income, and economic globalization on CO2 emissions in APEC countries from 1990 to 2022. The empirical evidence suggests that a 1% increase in the shadow economy leads to a corresponding increase of 0.0861% in CO2 emissions. Economic growth, shadow economy, and economic globalization are positively associated with CO2 emissions in APEC countries. However, electricity supply from renewable sources and income from natural resources are negatively associated with CO2 emissions. Several policy implications need to be considered to address the shadow economy and its potential impact on CO2 emissions in APEC countries. Strengthening the enforcement of environmental laws and regulations is crucial in preventing the shadow economy's negative environmental impact. This includes targeting illegal activities such as logging, poaching, and dumping, which contribute to carbon emissions. Encouraging the transition to clean and sustainable energy sources can help mitigate the shadow economy's contribution to CO2 emissions.
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