Climate policy uncertainty and corporate investment: evidence from the Chinese energy industry

Ren, Xiaohang; Shi, Yukun; Jin, Chenglu

doi:10.1007/s43979-022-00008-6

Cited by 24 publications

(6 citation statements)

References 71 publications

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“…Governance quality contributes to better investment decisions for the corporation. However, increased EPU has adverse impacts on corporate investments [11], whereas Ren et al [12] find different impacts of EPU on corporate investments at different ranges of EPU. EPU also has negative impacts on ES and climate change mitigation by increasing CO 2 emissions [13][14][15].…”

Section: Introductionmentioning

confidence: 94%

“…Compared to pooled regression, quantile regression offers various advantages, including being more resistant to outliers in the response measurements and making no assumptions about the distribution of the target variable [30,31]. Since EPU may have different impacts at its different ranges [12], the quantile regression could be helpful to understand the impact of EPU at its different levels.…”

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confidence: 99%

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Comparative Analysis of the Impact of Policy Uncertainty, Agricultural Output, and Renewable Energy on Environmental Sustainability

Nan,

He,

Solangi

et al. 2023

Sustainability

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The comparative analysis of the effect of economic policy uncertainty on environmental sustainability is imperious as it can provide critical insights into the link between economic policies and environmental sustainability. Economic policy uncertainty may have different impacts in different economies. The present study provides a comparative analysis of the effect of economic policy uncertainty on environmental sustainability in developed and emerging economies. The study employs pooled ordinary least squares and panel quantile regression to analyze data from 2001 to 2019. Moreover, the study also compares the impact of economic policy uncertainty on environmental sustainability across two different econometric methods. It also compares the results across different quantiles of the distribution of variables. Moreover, the study includes the agriculture output, renewable energy consumption, and foreign direct investment in the model. The results show that economic policy uncertainty negatively and significantly impacts environmental sustainability as it increases GHG emissions. Moreover, agriculture output increases GHG emissions in developed economies at higher quantiles. Furthermore, the results also confirm the pollution haven hypothesis, while renewable energy consumption has a positive effect on environmental sustainability as it significantly reduces GHG emissions. The study stresses that governments should take measures to minimize economic policy uncertainty to improve environmental sustainability. In addition, effective policies to enhance openness in the policymaking process and offer long-term policy certainty and foster more stable investment conditions would encourage renewable energy and reduce GHG emissions.

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Section: Introductionmentioning

confidence: 94%

mentioning

confidence: 99%

Comparative Analysis of the Impact of Policy Uncertainty, Agricultural Output, and Renewable Energy on Environmental Sustainability

Nan,

He,

Solangi

et al. 2023

Sustainability

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“…Hoang (2022) found a significant negative effect of CPU on R&D investment for high‐emitting firms. Ren, Shi, et al (2022) identified a nonlinear relationship between CPU and firm investment. Ye (2022) showed climate risk significantly influencing economic activity, financial markets, and energy markets.…”

Section: Literature and Hypothesis Developmentmentioning

confidence: 99%

Exploring the unpredictable nature of climate policy uncertainty: An empirical analysis of its impact on commodity futures returns in the United States

Tang,

Lee,

Liu

et al. 2024

Journal of Futures Markets

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This study offers a nuanced examination of the interplay between climate policy uncertainty (CPU) and three categories of the US commodity futures returns (metals, energy, and soft commodities). By integrating a regression framework with a Markov regime‐switching approach, our results uncover both linear and nonlinear effects of CPU in varying volatility contexts. This comprehensive methodological approach sheds light on CPU's diverse impacts across various types of commodity futures. The findings illustrate CPU's notable influence on metal and energy futures in low‐volatility regime, contrasted with its more pronounced effect on soft commodities during high‐volatility regime. These insights are pivotal for investors strategizing in light of CPU, and underscore the significance of renewable energy in alleviating climate policy uncertainties within commodity markets.

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“…Climate risk has also become popular in the finance literature since climate change has been found to affect financial markets (Oloko, Adediran, & Fadiya, 2022). Another dimension to the importance of climate risk is the significant impact of climate policy uncertainty on investment (Ren, Shi, & Jin, 2022; Bouri, Iqbal, & Klein, 2022). This study contributes to a growing body of research on the diversification potential of green investments.…”

Section: Literature Reviewmentioning

confidence: 99%

Hedging potentials of green investments against climate and oil market risks

Adediran¹,

Swaray

Orekoya³

et al. 2023

FREP

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PurposeThis study aims to examine the ability of clean energy stocks to provide cover for investors against market risks related to climate change and disturbances in the oil market.Design/methodology/approachThe study adopts the feasible quasi generalized least squares technique to estimate a predictive model based on Westerlund and Narayan’s (2015) approach to evaluating the hedging effectiveness of clean energy stocks. The out-of-sample forecast evaluations of the oil risk-based and climate risk-based clean energy predictive models are explored using Clark and West’s model (2007) and a modified Diebold & Mariano forecast evaluation test for nested and non-nested models, respectively.FindingsThe study finds ample evidence that clean energy stocks may hedge against oil market risks. This result is robust to alternative measures of oil risk and holds when applied to data from the COVID-19 pandemic. In contrast, the hedging effectiveness of clean energy against climate risks is limited to 4 of the 6 clean energy indices and restricted to climate risk measured with climate policy uncertainty.Originality/valueThe study contributes to the literature by providing extensive analysis of hedging effectiveness of several clean energy indices (global, the United States (US), Europe and Asia) and sectoral clean energy indices (solar and wind) against oil market and climate risks using various measures of oil risk (WTI (West Texas intermediate) and Brent volatility) and climate risk (climate policy uncertainty and energy and environmental regulation) as predictors. It also conducts forecast evaluations of the clean energy predictive models for nested and non-nested models.

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Climate policy uncertainty and corporate investment: evidence from the Chinese energy industry

Cited by 24 publications

References 71 publications

Comparative Analysis of the Impact of Policy Uncertainty, Agricultural Output, and Renewable Energy on Environmental Sustainability

Comparative Analysis of the Impact of Policy Uncertainty, Agricultural Output, and Renewable Energy on Environmental Sustainability

Exploring the unpredictable nature of climate policy uncertainty: An empirical analysis of its impact on commodity futures returns in the United States

Hedging potentials of green investments against climate and oil market risks

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