Information Diffusion and Spillover Dynamics in Renewable Energy Markets

39 Pages Posted: 7 Apr 2021

See all articles by Samir Cedic

Samir Cedic

Linkoping University

Alwan Mahmoud

Linkoping University

Matteo Manera

University of Milan-Bicocca, Italy - Department of Economics, Management and Statistics (DEMS); Fondazione Eni Enrico Mattei (FEEM), Milan, Italy

Gazi Salah Uddin

Linkoping University - Department of Management and Engineering Division

Date Written: April 6, 2021

Abstract

The aim of this paper is to analyze the connectedness between renewable energy (RE) sectors, the oil & gas sector and other assets using time-scale spillover approach. We find that the RE bioenergy firms are the most connected to oil & gas firms and oil prices. The bond market transmits spillover to the RE sectors, while it receives spillover from the oil & gas sector. Moreover, short-run connectedness drives the dynamic total connectedness. Since changes in bond rates mainly spillover to RE firms and not to oil & gas firms, policy makers should also be aware that changes in interest rates may impact the societal transition to a RE based energy system. Since a shock that increases connectedness in the short run will deter investors from investing in RE assets, it is important for climate policy makers to develop policies that reduce the effect of increased connectedness on RE investments.

Keywords: Renewable Energy, Connectedness, Frequencies, Dynamics, Spillovers

JEL Classification: C1, G15, Q2, Q3, Q43

Suggested Citation

Cedic, Samir and Mahmoud, Alwan and Manera, Matteo and Uddin, Gazi Salah, Information Diffusion and Spillover Dynamics in Renewable Energy Markets (April 6, 2021). FEEM Working Paper No. 10.2021, Available at SSRN: https://ssrn.com/abstract=3820490 or http://dx.doi.org/10.2139/ssrn.3820490

Samir Cedic

Linkoping University ( email )

Överstegatan 30
Linkoping, 581 83
Sweden

Alwan Mahmoud

Linkoping University ( email )

Överstegatan 30
Linkoping, 581 83
Sweden

Matteo Manera (Contact Author)

University of Milan-Bicocca, Italy - Department of Economics, Management and Statistics (DEMS) ( email )

Via Bicocca degli Arcimboldi, 8
Milan, 20126
Italy
+39 02 6448 5819 (Phone)
+39 02 6448 5878 (Fax)

HOME PAGE: http://www.matteomanera.it

Fondazione Eni Enrico Mattei (FEEM), Milan, Italy ( email )

Corso Magenta, 63
Milan, 20123
Italy
+39 02 520 36944 (Phone)

HOME PAGE: http://www.feem.it

Gazi Salah Uddin

Linkoping University - Department of Management and Engineering Division ( email )

Linköping, 581 83
Sweden

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