The Effect of Climate Policy Uncertainty and Financial Globalization Uncertainty on Oil Market Fear: New Insight from QARDL

Articles in Press

Document Type : Research Paper

Authors

Department of Economics, Faculty of Business and Management, Universiti Sultan Zainal Abidin, Terengganu, Malaysia.

Abstract

The oil implied shocks index of Christiane Baumeist is a prominent measure for market fear. This article adopts the oil implied shocks index (OPS) to examine the impact of various uncertainty indicators and economic performance on oil market fear in Nigeria. Our uncertainty proxies acknowledged multiple viewpoints, particularly the climate policy uncertainty (CPU), financial globalization uncertainty (FGU), and economic policy uncertainty (EPU). Based on the Quantile Auto Regressive Distributive Lag model (QARDL), our empirical findings reveal that the impact of CPU, FGU, EPU, and INC on OPS is quantile-based and heterogeneous by virtue of the productivity growth and these uncertainties. Precisely, the CPU has increasingly become an important determinant sparking oil market fear across the quantiles. CPU play an essential role in deepening oil market fear in Nigeria. The Non-linear ARDL results confirmed the positive relationship of all the determinants on OPS. Policy recommendations are discussed accordingly in the last part of the paper.

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References

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Available Online from 01 September 2025

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