The Asymmetric Effect of Oil Prices, Technological Innovation, and Investor Sentiment on Clean Energy Stock Markets : Evidence From QARDL Approach

The nonlinear, asymmetric effects of oil prices, technological innovation, and investor sentiment on the clean energy stock market are quantified in this study using the quantile autoregressive distribution lag (QARDL) method and the quantile Granger causality test. This approach is based on taking the relationship between various markets in various stock market states into account. The empirical research shows that there is a unidirectional Granger causality between oil prices and clean energy stock and that oil prices have asymmetric effects on the values of clean energy stock in both the short and long runs. Technological innovation and clean energy stock are significantly one-way Granger causality in terms of most quantile. In the long run, technological innovation has a positive impact on clean energy in most quantile; however, in the short term, it depreciates the value of clean energy stock at very high quartiles while greatly enhancing it at very low quartiles with high volatility. In the long and short terms, respectively, investor sentiment exhibits a significant two-way Granger causality and a negative long-run cointegration with clean energy stock prices at most quartiles. By arguing that using oil and clean energy as risky portfolios can increase portfolio diversification returns, our analysis offers important implications for green energy policymakers to support the transformation of the energy mix. And our analysis suggests that the link between clean energy stock and technological innovation should be closely monitored, with an eye on the shocks that technological innovation can bring. If stock markets for clean energy are to remain steady, it is essential to maintain investor confidence in the face of unexpected developments. Our research helps investors and agents identify the scope and direction of extreme risk spillovers between the energy and stock markets in a variety of market scenarios, paving the way for investment in green financial development