The Nexus between Green Investments and Crude Oil Prices Using Linear and Nonlinear Approaches

Abstract

We examine the relationship between green investments and crude oil prices. The results show that there is a long-run equilibrium relationship and indicate asymmetric cointegration between the variables. In addition, the result of linear Granger causality finds that green investments lead crude oil prices in one direction. However, green investments have a bi-directional relation with oil prices using the nonlinear Granger causality test. The results of this paper provide the government agencies and market participants with valuable information on decision makings.