Global Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence

Connections to world markets facilitate local markets developments to support more efficient capital allocation and greater investment and growth opportunities. Under the framework of cross-market rebalancing theory, in this study, we aim to systematically examine the market connections among world...

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Autores principales:	Yang Liu, Xueqing Yang, Mei Wang
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	renewable energy market European carbon allowance capital market energy market return transmission market connection Technology T
Acceso en línea:	https://doaj.org/article/4c2528654fcc4c9c8f0c5ba941322557
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spelling	oai:doaj.org-article:4c2528654fcc4c9c8f0c5ba9413225572021-11-11T16:01:57ZGlobal Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence10.3390/en142172861996-1073https://doaj.org/article/4c2528654fcc4c9c8f0c5ba9413225572021-11-01T00:00:00Zhttps://www.mdpi.com/1996-1073/14/21/7286https://doaj.org/toc/1996-1073Connections to world markets facilitate local markets developments to support more efficient capital allocation and greater investment and growth opportunities. Under the framework of cross-market rebalancing theory, in this study, we aim to systematically examine the market connections among world financial, energy, renewable energy and European carbon markets by measuring the return spillovers from 2008 to 2021. We find that the renewable energy market is more closely connected to the world financial and energy markets in the sense of the return transmission, while the carbon market is less connected to them. However, due to improved market regulations and determinations related to fighting climate change, the connections between the carbon market and other markets have gradually intensified. Plotting the return spillover indexes, we observe that strong return spillovers from the renewable energy market to other markets occurred when large investment plans were announced. Regarding the carbon market, regulation changes introduced by the EU Commission to improve and stabilize market environment induced intensified return transmission from carbon market to other markets. Another interesting finding is that the highly intensified return transmission among markets due to the COVID-19 crisis started to loosen when COVAX published the first interim distribution forecast on 3 February 2021.Yang LiuXueqing YangMei WangMDPI AGarticlerenewable energy marketEuropean carbon allowancecapital marketenergy marketreturn transmissionmarket connectionTechnologyTENEnergies, Vol 14, Iss 7286, p 7286 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	renewable energy market European carbon allowance capital market energy market return transmission market connection Technology T
spellingShingle	renewable energy market European carbon allowance capital market energy market return transmission market connection Technology T Yang Liu Xueqing Yang Mei Wang Global Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence
description	Connections to world markets facilitate local markets developments to support more efficient capital allocation and greater investment and growth opportunities. Under the framework of cross-market rebalancing theory, in this study, we aim to systematically examine the market connections among world financial, energy, renewable energy and European carbon markets by measuring the return spillovers from 2008 to 2021. We find that the renewable energy market is more closely connected to the world financial and energy markets in the sense of the return transmission, while the carbon market is less connected to them. However, due to improved market regulations and determinations related to fighting climate change, the connections between the carbon market and other markets have gradually intensified. Plotting the return spillover indexes, we observe that strong return spillovers from the renewable energy market to other markets occurred when large investment plans were announced. Regarding the carbon market, regulation changes introduced by the EU Commission to improve and stabilize market environment induced intensified return transmission from carbon market to other markets. Another interesting finding is that the highly intensified return transmission among markets due to the COVID-19 crisis started to loosen when COVAX published the first interim distribution forecast on 3 February 2021.
format	article
author	Yang Liu Xueqing Yang Mei Wang
author_facet	Yang Liu Xueqing Yang Mei Wang
author_sort	Yang Liu
title	Global Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence
title_short	Global Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence
title_full	Global Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence
title_fullStr	Global Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence
title_full_unstemmed	Global Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence
title_sort	global transmission of returns among financial, traditional energy, renewable energy and carbon markets: new evidence
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/4c2528654fcc4c9c8f0c5ba941322557
work_keys_str_mv	AT yangliu globaltransmissionofreturnsamongfinancialtraditionalenergyrenewableenergyandcarbonmarketsnewevidence AT xueqingyang globaltransmissionofreturnsamongfinancialtraditionalenergyrenewableenergyandcarbonmarketsnewevidence AT meiwang globaltransmissionofreturnsamongfinancialtraditionalenergyrenewableenergyandcarbonmarketsnewevidence
_version_	1718432411138654208

Global Transmission of Returns among Financial, Traditional Energy, Renewable Energy and Carbon Markets: New Evidence

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