For instance, the share of renewables in the energy mix should be surged to ameliorate the environmental quality. Our findings deduce a few policy implications to replenish environmental quality. Finally, geopolitical risk tends to decrease CO2 emissions as well as ecological footprint. On the contrary, non-renewable energy consumption escalates both ecological footprint and CO2 emissions. Moreover, renewable energy ameliorates environmental quality because it plunges both ecological footprint and CO2 emissions. The findings from the AMG estimator expound that there exists environmental Kuznets curve (EKC) for E7 countries. In addition to this, the present study uses augmented mean group (AMG) estimator to provide long-run relationship among the selected variables. Further, we utilize both the ecological footprint and CO2 emissions as proxies of environmental degradation and employ second-generation panel methods for robust findings.
To fill this gap, the inquiry at hand aims to scrutinize the influence of geopolitical risk on environmental degradation for E7 countries while controlling the effect of renewable energy, non-renewable energy, and GDP. However, the relationship between geopolitical risk and environmental degradation is understudied in the previous literature. To limit environmental degradation, prior literature discerns several macroeconomic, socio-economic, and institutional factors that affect environmental degradation.
Outcomes also confirm that larger firms and those with higher Return on Assets (ROA) are more sensitive to crash risk.Įnvironmental degradation is frequently cited as one of the eminent issues in the modern era. It also appears that when the exchange rate rises, Iranian investors prefer to buy companies’ shares to maintain the purchasing power of their money. When the total amount of bad news accumulated over time reaches a tipping point, it leads to a stock crash. In Iran’s economically uncertain situation due to sanctions, managers are trying to overstate financial performance and conceal bad news to have better access to financing so, In fact, with rising inflation and unemployment, on the one hand, the amount of savings and the purchasing power of the people have decreased, and on the other hand, it has reduced the sales of companies due to the increase in the pricing of manufactured products. Consistent with our expectations, the results show that there is a positive association between the inflation and unemployment rates and stock price crash risk, whereas the GDP and exchange rates are correlated negatively with crash risk. Pattern, and the DUVOL (down-to-up volatility) measure is defined as a proxy for stock price crash risk. Furthermore, the research model has been estimated using a fixed effect The sample of the study includes 152 Iranian companies listed on the Tehran Stock Exchange (TSE) between 20. This study also seeks to examine whether there is a significant relationship between some firm characteristics and falling stock prices. The present study aims to investigate the effects of macroeconomic variables on stock price crash risk in the economically uncertain conditions of Iran’s market.
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