Journal of Energy Markets

Derek W. Bunn
London Business School

This issue of The Journal of Energy Markets has a more macro focus than usual. The impact of energy markets on the global economy is never far from headline news, and related empirical research is accordingly of considerable political and social value.

The first paper in this issue, “Empirical research on the relationship between renewable energy consumption, foreign direct investment and economic growth in South Asia” by Emon Kalyan Chowdhury and Rupam Chowdhury, applies random effect and generalized method-of-moments models using panel data from 1990 to 2020. The results indicate that foreign direct investment (FDI) and renewable energy consumption have a significant positive impact on economic progress, but that FDI has a negative impact and economic progress has a significant positive impact on renewable energy consumption in South Asian countries. This study proposes some approaches to using FDI in renewable energy sectors to enhance economic progress in South Asia.

The issue’s second paper poses a question: “Do sovereign wealth funds dampen the effect of oil market volatilities on gross domestic product growth?” Here, Salem Boubakri and Ahlem Harrouch-Trabelsi examine the effect of oil price volatilities on gross domestic product growth in some oil-exporting countries. A panel smooth transition regression model is used to test this effect. The authors’ findings demonstrate that this effect is nonlinear and depends on the threshold level of sovereign wealth fund asset growth. Their results indicate that such asset growth plays a significant role in dampening the effect of oil market volatilities on gross domestic product growth.

Finally, in their paper “Dynamic spillover between the crude oil, natural gas and BRICS stock markets”, Tarek Sadraoui, Rym Regaïeg, Wajdi Moussa, Nidhal Mgadmi and Chokri Arfa investigate the interaction of these energy commodity prices on stock market asset values. They show a substantial dynamic spillover of oil and gas prices to the Brazilian, Russian, Indian, Chinese and South African stock markets. As a consequence, hedging strategies in the asset markets need to be well informed by news from the oil and gas sectors.

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