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Evaluating the effect of geopolitical risks on the growth rates of emerging countries

Author

Listed:
  • Barış Soybilgen

    (Istanbul Bilgi University)

  • Huseyin Kaya

    (Istanbul Medeniyet University)

  • Dincer Dedeoglu

    (Bahcesehir University)

Abstract

In this study, we analyze the relationship between geopolitical risks and growth using annual panel data from 18 emerging countries for the period from 1986 to 2016. For a robustness check, we use panel data with 5-year intervals. The news-based indices of Caldara and Iacoviello (2018) were used as a proxy for geopolitical risks. Our results show that the effect of geopolitical risks on growth rates is negative and significant. A 10 point increase in the geopolitical risk index causes a 0.2–0.4% decline in the GDP growth rate.

Suggested Citation

  • Barış Soybilgen & Huseyin Kaya & Dincer Dedeoglu, 2019. "Evaluating the effect of geopolitical risks on the growth rates of emerging countries," Economics Bulletin, AccessEcon, vol. 39(1), pages 717-725.
    • Handle: RePEc:ebl:ecbull:eb-18-00785
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    References listed on IDEAS

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    Cited by:

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    5. Olena STRYZHAK & Ramazan SAYAR & Yılmaz Onur ARI, 2022. "Geopolitical risks, GDP and tourism: an ARDL-ECM cointegration study on Ukraine," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 14(1), pages 85-113, May.
    6. Wang, Fei & Liu, Xiaoyan, 2023. "Resources extraction and geopolitical risk: A novel perspective of World's biggest economies," Resources Policy, Elsevier, vol. 85(PA).
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    More about this item

    Keywords

    Geopolitical Risk; Growth; Emerging Markets; Panel Data;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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