Energy Prices and Stock Market Associations with Economic Growth in Developed and Emerging Countries

This study examines the complex relationships among energy market dynamics, economic development, and stock market performance in South Asia. Using World Development Indicators data for the period 1995–2024, the study applies the Method of Moments Quantile Regression (MMQR) model to investigate the effects of fossil-fuel consumption, renewable energy adoption, and energy imports on market capitalisation across different quantiles. The results indicate that fossil-fuel and renewable-energy consumption have considerable effects on market capitalisation, although the magnitude and direction of these effects vary across quantiles. At lower quantiles, renewable energy has a more beneficial association with market capitalisation, suggesting its potential to strengthen market resilience in emerging economies. This effect diminishes at higher quantiles, potentially reflecting transition costs and structural barriers to the adoption of green energy. The relationship between economic growth and market capitalisation is uneven, suggesting that structural constraints may prevent macroeconomic gains from being reflected immediately in financial markets. The analysis highlights the need for targeted policy interventions that address the complex relationships among energy policies, market dynamics, and economic development. Policymakers should manage the transition to renewable energy carefully to minimise short-term disruptions and improve infrastructure for long-term financial and economic stability.