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How connected is the agricultural commodity market to the news-based investor sentiment?
Bogazici Univ, Turkey; Univ Zurich, Switzerland.
Copenhagen Business Sch, Denmark; Republ Turkey, Turkey.
Univ Cent Oklahoma, OK USA.
Linköping University, Department of Management and Engineering, Economics. Linköping University, Faculty of Arts and Sciences.
2022 (English)In: Energy Economics, ISSN 0140-9883, E-ISSN 1873-6181, Vol. 113, article id 106174Article in journal (Refereed) Published
Abstract [en]

Previous studies indicate a substantial time-variation in the co-movement of commodity futures markets and economic fundamentals. This paper examines the connectedness and directional spillovers for both the agricultural commodity futures markets and the corresponding sentiment indices. We first construct dynamic time-varying connectedness measures both for the agricultural commodity returns and sentiments. Then, we use panel data regressions and time-varying Granger causality tests to evaluate whether the spillovers between these returns and sentiments are influenced by the economic and financial uncertainties, including the global COVID-19 pandemic. In particular, we document that the COVID-19 induced uncertainty influences agricultural commodity returns and sentiments significantly around the first cycle of the pandemic in 2020. Last but not least, economic policy and financial market uncertainty are also found to be significant determinants of the connectedness between agricultural commodity returns and sentiment spillovers.

Place, publisher, year, edition, pages
ELSEVIER , 2022. Vol. 113, article id 106174
Keywords [en]
Spillovers; Agricultural commodities; Sentiment; COVID-19; Time-varying robust granger causality
National Category
Economics
Identifiers
URN: urn:nbn:se:liu:diva-190130DOI: 10.1016/j.eneco.2022.106174ISI: 000882699600004OAI: oai:DiVA.org:liu-190130DiVA, id: diva2:1713058
Available from: 2022-11-23 Created: 2022-11-23 Last updated: 2022-11-23

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Uddin, Gazi Salah
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