scholarly journals How Does Economic Policy Uncertainty Affect CO2 Emissions? A Regional Analysis in China

2021 ◽  
Author(s):  
Yan Liu ◽  
Zepeng Zhang
Keyword(s):  
Economic Policy ◽  
Panel Data ◽  
Environmental Regulation ◽  
Regional Analysis ◽  
Policy Implications ◽  
Kuznets Curve ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Explanatory Variables ◽  
The Impact

Abstract More recently, the COVID-19 pandemic outbreak has created massive economic policy uncertainty (EPU). EPU and its economic fallout have been a hot topic of study, however, the impact of EPU on CO2 emissions has been seldom addressed to date. This paper investigates the direct impact of the EPU on CO2 emissions and indirect effect via the environmental regulation at the national and regional levels using the panel data model and provincial panel data from 2003 to 2017 in China. The empirical results show that the central region is the most special one, which all explanatory variables except energy consumption are all non-significant even at the 10% level. For other samples, there is a significant positive correlation between EPU and CO2 emissions, whether in the national or regional level. Additionally, environmental regulation alone can achieve the purpose of curtailing carbon emissions. However, when the EPU is taken into consideration, environmental regulation exerts a significantly positive effect on CO2 emissions, leading to unintended increase in emissions. Moreover, the Environmental Kuznets Curve (EKC) hypothesis was confirmed in the national and eastern samples, while CO2 emissions increase monotonically as economic level grows for western datasets. Based on the overall findings, some policy implications were put forward.

scholarly journals Do Economic Policy Uncertainty and Geopolitical Risk Lead to Environmental Degradation? Evidence from Emerging Economies

2021 ◽  
Vol 13 (11) ◽  
pp. 5866
Author(s):  
Muhammad Khalid Anser ◽  
Qasim Raza Syed ◽  
Hooi Hooi Lean ◽  
Andrew Adewale Alola ◽  
Munir Ahmad
Keyword(s):  
Economic Policy ◽  
Renewable Energy ◽  
Environmental Degradation ◽  
Emerging Economies ◽  
Ecological Footprint ◽  
Policy Implications ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Integration Test ◽  
The Impact

Since the turn of twenty first century, economic policy uncertainty (EPU) and geopolitical risk (GPR) have escalated across the globe. These two factors have both economic and environmental impacts. However, there exists dearth of literature that expounds the impact of EPU and GPR on environmental degradation. This study, therefore, probes the impact of EPU and GPR on ecological footprint (proxy for environmental degradation) in selected emerging economies. Cross-sectional dependence test, slope heterogeneity test, Westerlund co-integration test, fully modified least ordinary least square estimator, dynamic OLS estimator, and augmented mean group estimator are employed to conduct the robust analyses. The findings reveal that EPU and non-renewable energy consumption escalate ecological footprint, whereas GPR and renewable energy plunge ecological footprint. In addition, findings from the causality test reveal both uni-directional and bi-directional causality between a few variables. Based on the findings, we deduce several policy implications to accomplish the sustainable development goals in emerging economies.

scholarly journals Economic Policy Uncertainty, Environmental Regulation, and Green Innovation—An Empirical Study Based on Chinese High-Tech Enterprises

2021 ◽  
Vol 18 (18) ◽  
pp. 9503
Author(s):  
Yue Zhu ◽  
Ziyuan Sun ◽  
Shiyu Zhang ◽  
Xiaolin Wang
Keyword(s):  
Economic Policy ◽  
Environmental Regulation ◽  
Positive Impact ◽  
Environmental Regulations ◽  
High Tech ◽  
Policy Uncertainty ◽  
Green Innovation ◽  
Economic Policy Uncertainty ◽  
Innovation Output ◽  
The Impact

As the continuous changes in environmental regulations have a non-negligible impact on the innovation activities of micro subjects, and economic policy uncertainty has become one of the important influencing factors to be considered in the development of enterprises. Therefore, based on the panel data of Chinese high-tech enterprises from 2012–2017, this paper explores the impact of heterogeneous environmental regulations on firms’ green innovation from the perspective of economic policy uncertainty as a moderating variable. The empirical results show that, first, market-incentivized environmental regulation instruments have an inverted U-shaped relationship with innovation output, while voluntary environmental regulation produces a significant positive impact. Second, the U-shaped relationship between market-based environmental regulation and innovation output becomes more pronounced when economic policy uncertainty is high. However, it plays a negative moderating role in regulating the relationship between voluntary-based environmental regulation and innovation output. This paper not only illustrates the process of technological innovation by revealing the intrinsic mechanism of environmental regulation on firm innovation, but also provides insights for government in environmental governance from the perspective of economic policy uncertainty as well.

Environmental Regulation, Economic Policy Uncertainty, and Green Technology Innovation

2021 ◽  
Author(s):  
Xiaoqing Li ◽  
Zongyi Hu ◽  
Qing Zhang
Keyword(s):  
Economic Policy ◽  
Environmental Regulation ◽  
Technology Innovation ◽  
Negative Influence ◽  
Green Technology ◽  
Policy Uncertainty ◽  
Economic Policies ◽  
Green Innovation ◽  
Economic Policy Uncertainty ◽  
The Impact

Abstract Green technology innovation is imperative to sustainable and environmentally sound economic development and is currently facing increasingly serious environmental threats. However, existing research has overlooked the uncertainties in economic policies. Based on the logical relationship between environmental regulation, economic policy uncertainty, and green technology innovation, this study empirically analyzed the quantitative relationship among these three variables using the fixed-effect panel method and provincial panel data from 2000 to 2017 for 30 administrative regions of China. The results show that environmental regulation is positively correlated with green innovation, whereas economic policy uncertainty has a negative influence on green innovation, thereby regulating the relationship between the remaining two factors. Moreover, considerable regional heterogeneity exists in these causal influences, i.e., environmental regulation promotes green innovation in the eastern and middle regions but not significantly in the west. The uncertainty actively moderates the impact of environmental regulation on green innovation in all regions with an adjustment coefficient of approximately 0.8; however, it inhibits green innovation in different degrees, especially in the eastern and middle regions. Based on empirical results, we conclude that strict and appropriate environmental regulations are necessary and effective in China to encourage green technology innovation, especially in regions with uncertain economic policies.

Economic Policy Uncertainty in the Euro Area: Cross-Country Spillovers and Macroeconomic Impact

2019 ◽  
Vol 239 (5-6) ◽  
pp. 957-981 ◽  
Author(s):  
Volker Clausen ◽  
Alexander Schlösser ◽  
Christopher Thiem
Keyword(s):  
Economic Policy ◽  
Structural Var ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Financial Firms ◽  
Macroeconomic Impact ◽  
Variance Decompositions ◽  
Cross Country ◽  
Uncertainty Indices ◽  
The Impact

Abstract This paper analyzes spillovers and the macroeconomic effects of economic policy uncertainty (EPU) in Europe over the last two decades. Drawing on the newspaper-based uncertainty indices by Baker et al. (2016, Measuring Economic Policy Uncertainty. Quarterly Journal of Economics 131 (4): 1593–1636), we first use the Diebold and Yilmaz (2014 On the Network Topology of Variance Decompositions: Measuring the Connectedness of Financial Firms. Journal of Econometrics 182 (1): 119–134) connectedness index methodology to investigate the static and dynamic patterns of EPU spillovers. We find substantial spillovers across the European countries. Over time, Germany in particular has become increasingly connected to the other economies. In a second step, we investigate the economic impact of EPU shocks using a structural VAR. The detrimental influence of uncertainty turns out to be regime-dependent. We identify a pre-crisis, a crisis and a post-crisis regime, and the effect is only significant in the former two. Finally, the impact of EPU shocks is also heterogeneous across the monetary union’s most important members.

Economic policy uncertainty and fine wine prices

2020 ◽  
Vol 32 (3) ◽  
pp. 457-476
Author(s):  
Nithya Shankar ◽  
Bill Francis
Keyword(s):  
Economic Policy ◽  
Information Criterion ◽  
Government Policies ◽  
Time Lags ◽  
Policy Uncertainty ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
The Uk ◽  
The Impact ◽  
Wine Markets

Purpose The paper aims to investigate the impact of economic policy uncertainty (EPU) (i.e. uncertainty due to government policies) on fine wine prices. Design/methodology/approach The paper uses the Baker et al. (2016) monthly news-based measure of EPU for the leading wine markets: the USA, the UK, France, Germany and China in conjunction with monthly fine wine pricing data from the London International Vintners Exchange (Liv-ex). The wine sub-indices used are the Liv-ex 500 (Bordeaux), Burgundy 150, Champagne 50, Rhone 100, Italy 100, California 50, Port 50 and Rest of the World 50. The Prais–Winsten and Cochrane–Orcutt regressions are used for our analyses to correct for effects of serial correlation. Time lags are chosen based on the appropriate information criterion. Findings Changes in EPU levels negatively impact changes in the Liv-ex 500 index for all our leading wine markets except France, the Champagne 50 index for the UK and the Burgundy 150 and the Rhone 100 indices for Germany, with the effects being significant for at least up to a quarter before EPU is detected. The authors did not find significant results for the EPU of France. Practical implications The paper aims to provide insights into whether EPU creates opportunities or threats for investors and wineries. Originality/value A forward-looking news-based EPU measure is used to gain insights into how the different Liv-ex sub-indices react to increases in uncertainty centered around government policies across a sample of different countries.

THE ROLES OF ECONOMIC POLICY UNCERTAINTY AND THE COVID-19 PANDEMIC IN THE CORRELATION BETWEEN CRYPTOCURRENCY AND STOCK MARKETS

2020 ◽  
pp. 1-30
Author(s):  
LINGLING QIAN ◽  
YUEXIANG JIANG ◽  
HUAIGANG LONG ◽  
RUOYI SONG
Keyword(s):  
Economic Policy ◽  
Stock Market ◽  
The United States ◽  
Mixed Data ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Market Portfolio ◽  
Hedging Strategies ◽  
The World ◽  
The Impact

We are the first to explore the effect of economic policy uncertainty (EPU) and the COVID-19 pandemic on the correlation between the cryptocurrency index CRIX and the world stock market portfolio, as well as the hedging properties of CRIX. To this end, we mainly apply the dynamic conditional correlation model with mixed data sampling regressions, a threshold vector autoregressive model and the generalized impulse response function. We demonstrate that the correlation is influenced by the uncertainty stance of the economy and behaves differently in low-, medium- and high-uncertainty periods. Most of the abnormal market relations exist in high levels of EPU or during the COVID-19 period, and the impact of global EPU is greater than that of EPU originating in the United States, Europe, Russia and China. Moreover, the CRIX can serve as a hedge asset against the world stock market. The high (low) level of EPU has a significantly positive (negative) effect on the optimal hedge ratio of CRIX, which increases significantly during the COVID-19 period. Our findings have implications for risk management, portfolio allocations and hedging strategies.

scholarly journals Sensitivity of economic policy uncertainty to investor sentiment

2019 ◽  
Vol 36 (2) ◽  
pp. 114-129 ◽  
Author(s):  
Mobeen Ur Rehman ◽  
Nicholas Apergis
Keyword(s):  
Economic Policy ◽  
Investor Sentiment ◽  
Policy Uncertainty ◽  
Momentum Effect ◽  
Control Variables ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
Investor Sentiments ◽  
International Investors ◽  
The Impact

Purpose This paper aims to explore the impact of investor sentiments on economic policy uncertainty (EPU). The analysis also considers the momentum effect, stock market returns volatility and equity pricing inefficiencies across markets, which, to the best of the authors’ knowledge, has not been addressed in the literature. The role of these control variables has collectively been considered to have important behavioral implications for international investors Design/methodology/approach Quantile regressions are used for estimation purpose, as it provides robust and more efficient estimates rather than those coming from the traditional regression model. Findings The momentum effect is negative and significant only at higher quantiles, while oil prices are positive and significant across all quantiles. The exchange rate exerts a negative and significant effect on EPU, whereas equity price volatility (i.e. investor sentiment) exerts a negative and significant impact on EPU in most of the quantiles. Research limitations/implications The results have important implications for international investors and policymakers, especially in terms of the breakdown of economic policy uncertainty across different sample markets. The breakdown of complete sample period into sub-samples acts as a robust analysis and documents the similarity of the results for the Asian and developed markets cases, but not in the case of the European markets. Practical implications The findings imply the importance of financial stability that impacts the accumulation of systemic risks and adds smoothness to the financial cycle in particular geographical areas. Originality/value The contribution of this paper is threefold. First, existing literature highlights and empirically tests the impact of economic policy uncertainty on different market, macro-economic and global control variables. The analysis, however, performs it in the reverse order, i.e. analyzing the impact of the momentum effect (investor sentiment variables), equity market inefficiencies and volatility (market variables) and exchange rates and Brent oil (control variables). Second, to check the sensitivity of economic policy uncertainty, the analysis analyzes a wide range of markets, segregated as emerging, developed and European regions over the sample period to generate region-wise implications. Finally, the analysis explores the relationship of aforementioned variables with economic policy uncertainty keeping in view the non-linear structure and prior evidence and investor sentiments and economic policy uncertainty in the regression model.

Sign in / Sign up

Export Citation Format

Share Document