Investigating the role of metal and commodity classes in overcoming resource destabilization. (December 2022)

• Record Type: Journal Article
• Authors: Siddique, Md Abubakar; Nobanee, Haitham; Karim, Sitara; Naz, Farah
• Is Part Of: Resources policy. Volume 79(2022)
• Publication Date: 2022-12
• Subjects: Commodity-classes -- Frequency spillovers -- Metal-classes -- Time-connectedness -- Resource utilization; Mines and mineral resources -- Periodicals; Ressources minérales -- Périodiques; Ressources naturelles -- Gestion -- Périodiques; Environnement -- Politique gouvernementale -- Périodiques; 333.8
• DOI: 10.1016/j.resourpol.2022.103075
• Languages: English
• ISSNs: 0301-4207

Abstract

Abstract: The resource destabilization and accentuated demands for sustainability across the globe have motivated the current study to examine the nexus between the classes of metals and commodities to highlight the role of various metals in reducing the carbon footprint. We employed two alternative perspectives of time and frequency connectedness between metal classes including energy metals, precious metals, and industrial metals and commodities like energy and agriculture for the period encompassing June 1, 2012 to February 11, 2022. We found that spillovers are fashioned in the similar class than across the metal classes and commodities. Energy metals are strongly disconnected revealing their diversification benefit while other metals and commodities form intra-class spillovers. The time-varying spillovers emphasized on the distressed periods with spiked spillovers and net time-varying spillovers demonstrated leading risk contribution of crude oil and fuel. Our sub-sample analysis also detected the stronger inter-class connectedness in the post-COVID time. The findings inform policymakers, environmentalists, investors seeking sustainable portfolios, and asset managers. Highlights: We unveiled the nexus between metal and commodities classes. The study utilized time-frequency methodologies to determine interconnectedness. We found in-class spillovers between metals and commodities. Time-varying spillovers detected spiked connectedness during crises times. Crude oil and fuel are net transmitters while gas is net risk receiver.