Do all renewable energy stocks react to the war in Ukraine? Russo-Ukrainian conflict perspective

Abstract

This study investigates how renewable energy markets reacted to the war in Ukraine in 2022 using event study and network connectedness analyses and compares this effect to traditional energy sources. Combining event study with connectedness analysis is of great interest in identifying abnormal returns from the Russia-Ukraine conflict event. The risk-return profiles make clean energy more appealing to investors, and increased investment in clean energy subsectors leads to improved climate change mitigation. Sampled data are wrangled daily from 03 August 2021 to 30 March 2022. The results confirm that renewable energy markets have positive and significant cumulative abnormalities while traditional energy markets are heavily affected during the post-war. Moreover, we find higher pairwise return connectedness after the announcement event than during and before the war in Ukraine. The geothermal and full cell markets are the more robust net information transmitter to other clean energy subsectors. Finally, renewable energy appeared more pertinent during and after the Russian invasion of Ukraine, given its properties to serve diversifications and hedging tools.