Journal article
Are interconnectedness and spillover alike across green sectors during the COVID-19 and the Russia–Ukraine conflict?
Energy economics, v 144, 108293
Feb 2025
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
This study investigates interconnectedness and spillover dynamics among nineteen clean energy equity sub-sectors during the COVID-19 pandemic and the Russia-Ukraine conflict. Using the Time-Varying Parameter Vector Autoregression (TVP-VAR) Joint Connectedness approach, the findings reveal intensified interconnectedness during crises, with the Total Connectedness Index (TCI) surpassing 100 % during COVID-19, while stabilizing amid the Russia-Ukraine conflict, indicating a partial resilience in clean energy markets. Sub-sectors such as Energy Management, Recycling, and Water consistently serve as risk transmitters, while Wind and Geothermal absorb risks, emphasizing heterogeneous roles within the sector. This high level of interconnectedness limits the ability to reduce risks within the clean energy sector alone during turbulent times. Policy interventions, such as subsidies and regulatory support for critical risk-transmitting sub-sectors, could stabilize the market and reduce systemic vulnerabilities. Sectors like Solar and Smart Grid adapt to market conditions, taking on different roles depending on crisis-specific factors, particularly in response to energy security and sustainability policies. Investors may enhance their portfolio stability by focusing on the risk-absorbing sub-sectors, such as Wind and Geothermal, and also adopting dynamic asset allocation strategies during crises.
•Examines spillover dynamics among 19 clean energy sub-sectors during crises.•Total connectedness peaks 100 % in COVID-19 and stabilizes during Russia-Ukraine conflict.•Energy Management, Recycling, and Water consistently transmit risk; Wind and Geothermal absorb it.•Intra-sector diversification offers limited protection during high interconnectedness periods.•Findings guide agile investment strategies and support targeted policy making.
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Details
- Title
- Are interconnectedness and spillover alike across green sectors during the COVID-19 and the Russia–Ukraine conflict?
- Creators
- Waqas Hanif - Rabat Business School, Université Internationale de Rabat, Rabat, MoroccoRim El Khoury - Lebanese American UniversityNadia Arfaoui - IDRAC Business School, FranceShawkat Hammoudeh - Drexel University
- Publication Details
- Energy economics, v 144, 108293
- Publisher
- Elsevier
- Number of pages
- 30
- Grant note
- Portuguese national funding agency for science, research and technology under a project: UIDB/04007/2020
The corresponding author is pleased to acknowledge financial sup-port fromFCT, I.P., the Portuguese national funding agency for science, research and technology under a project (Grant UIDB/04007/2020) .
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:001436792400001
- Scopus ID
- 2-s2.0-85218449367
- Other Identifier
- 991022031673304721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Economics