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Omicron Delta Epsilon Graduate Student Session

Paper Session

Friday, Jan. 4, 2019 12:30 PM - 2:15 PM

Atlanta Marriott Marquis, M105
Hosted By: Omicron Delta Epsilon
  • Chair: Ali Zadeh, Susquehanna University

Would Energy Tax Policy Significantly Influence the Diffusion Rate of The Renewable Energy Portfolio in The United States?

Hind Alnafisah
,
Howard University

Abstract

This paper empirically investigates the impact of tax credit to renewable energy and net energy import on renewable energy consumption in the United States. The study presents findings on the possible factors that may affect four main renewable energy consumer groups which are residential, commercial, transportation and industrial consumption. Using a linear model and time series data for the period 1985-2015. Our empirical results indicate that inward tax credit is an important vehicle for achieving renewable energy development. It clearly is seen that commercial, industrial, and transportation consumption of renewable energy significantly increase. Imposing more import barriers that discourage energy import can greatly help the domestic renewable energy consumption. However, industrial consumption of renewable energy is affected positively by the increase in the prices of industrial gas and negatively by increasing in the prices of industrial electricity. While many renewable energy studies have relied on less precise measurement factors (e.g. international oil prices the only and main energy prices that determine renewable energy consumption), our study uses direct indicators as a measurement of renewable energy consumption. We find tax credit has a significant positive impact. Other key factors that spur renewable energy consumption are co2 emission, electricity prices, and gas prices. Thus, suggesting the federal government of United States to continue subsidizing renewable energy development which helps to decrease the prices of renewable energy( electricity for the four types of renewable energy consumers), and spur renewable energy consumption and development. Another key factor that spurs renewable energy consumption is GDP.

Key Words: Renewable energy consumption,Energy Tax Policy, Crude Oil Prices, gas Prices, and Coal prices.

JEL classification: C36, Q2, Q42.

Hind Alnafisah: PhD candidate, Department of Economics, Howard University, Washington DC, United States;
Hind Alnafisah: Teaching Assistant, Economics Department, School of Business, Princess Nora bint Abdul Rahman University, Riyadh, Saudi Arabia.

Impacts of Renewable Fuel Policy with Sentiment on the Energy and Agricultural Markets: A Vine Copula-based ARMA-GJR-GARCHX Model

Kuan-Heng Chen
,
Stevens Institute of Technology
Kuan-Ju Chen
,
Washington State University

Abstract

This study investigates how the renewable fuel policy affects the investment decision making process in the U.S. energy and agricultural markets. The policy requires the U.S. transportation sector to contain a minimum volume of renewable fuels to reduce greenhouse gas emissions and dependence on imported oil. We use corn and sugar as proxies for ethanol and soybeans to represent biodiesel because these are the main components to produce alternative fuels. Meanwhile, crude oil is selected as another ingredient in conventional fuels. The effect of renewable fuel policies is evaluated on the corn, soybean, sugar, and cruel oil markets using a vine copula-based ARMA-GJR-GARCHX model. In order to capture investor reaction to fluctuations in the market, we incorporate the Sentiment Score provided by Thomson Reuters News into the model. Our results show the positive effects of the U.S. renewable energy policy and Sentiment Score on the volatility of commodity returns. Controlling for financial crisis of 2008, the average returns of the renewable energy market are increased after the passage of the updated renewable fuel policy, in particular, sugar that exhibits a significantly positive impact. This increase might be due to benefits from increasing biofuel production. In addition, using a vine copula technique to better capture the asymmetric and nonlinear dependencies among the commodities that make up the renewable energy market, our findings provide policymakers and industry participants with enhanced information on strategies for risk management, portfolio optimization, hedging, and asset pricing.

The Impact of Employment Protection on the Quality of Job Match: Evidence from Job Duration Data in South Korea

Tai Lee
,
University of Missouri-Columbia

Abstract

This study analyzes how firms and workers respond to regulations limiting the use of temporary employment. In 2007, the Korean government introduced a labor market reform that required employers to convert a workers contract from a temporary to permanent one in order to continue to employ a worker for more than two years. From the perspective of employers, the new regulation can be thought of as a potential increase in firing costs for temporary workers after two years. Thus, employers have an incentive to improve the screening process to establish better matches and weed out bad matches prior to the increase in firing costs. From the perspective of workers, temporary workers have an incentive to provide greater effort after the policy change because the reform offers a potential path to permanent employment. My result shows economically and statistically significant decreases in the probability of job separation in the first five months of tenure after the policy change, which implies that firms respond to the increased protection for temporary workers by improving their recruitment practices. However, based on observed overtime, I find no evidence supporting the view that temporary employees provide greater effort after the reform.

Credit Shock Propagation in Firm Networks

Gustavo Cortes
,
University of Illinois-Urbana-Champaign

Abstract

We study how bank credit shocks propagate through supplier-customer firm networks. We do so using administrative data that covers the near-universe of firm-to-firm transactions in Brazil around the debacle of Lehman Brothers. Using the counter-cyclical reaction of government-owned banks in Brazil after Lehman's failure as a policy experiment, we show that credit shocks originated in bank-firm relationships are transmitted throughout the network of suppliers and customers, with measurable consequences for firms' real outcomes and survival probability. A firm with direct and indirect access to government credit (through its customers or suppliers) observed a 12.5% greater survival probability, vis-`a-vis 4% when the firm has only direct access. Critically, we uncover drawbacks of these interventions, including a persistent increased concentration in the market power of firms that benefited from government liquidity.
Discussant(s)
Hind Alnafisah
,
Howard University
Kuan-Ju Chen
,
Washington State University
Tai Lee
,
University of Missouri-Columbia
Gustavo Cortes
,
University of Illinois-Urbana-Champaign
JEL Classifications
  • A1 - General Economics