The linkage between clean energy stocks and the fluctuations in oil price and financial stress in the US and Europe? Evidence from QARDL approach

This paper investigates the clean energy stock returns against the changes in oil prices, gold prices, and financial stress in the US and European economies by applying Quantile Autoregressive Distributed Lag approach. The long-run results reveal that financial stress has a significantly negative effect on clean energy stock indices of the US and Europe in lower quantiles (i.e., bearish market conditions). Similarly, the negative effects are also found for gold prices on clean energy stocks of Europe in higher and extremely higher quantiles (when the market is bullish) and US in almost all the quantiles (i.e., bearish, normal, and bullish market conditions). However, the fluctuations in oil prices positively affect clean energy stocks of US and Europe in higher and extremely higher quantiles. In short-run, the negative effect of financial stress on clean energy stocks is conversely found in extreme higher quantiles of Europe and extreme higher and lower quantiles of the US. Moreover, the positive nexus between oil prices and clean energy stocks of the US are found across all the quantiles.