IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v72y2025ics1544612324015307.html
   My bibliography  Save this article

Global geopolitical risk and financial stability: Evidence from China

Author

Listed:
  • Zhu, Sha
  • Xia, Yuqin
  • Li, Qiuxuan
  • Chen, Yunjia

Abstract

This study provides evidence that global geopolitical risk (GPR) significantly impacts financial stability. By constructing five sub-market stress indices (banking, securities, foreign exchange, housing, and commodity), we assess sub-market stress spillovers and financial stress total connectedness for China using an improved Diebold and Yilmaz method. Furthermore, we innovatively investigate the relationship between GPR and financial stress total connectedness. The findings indicate that GPR positively affects financial stress total connectedness. More notably, GPR can predict financial stress total connectedness at least leading four months. The global geopolitical threats risk and unexpected geopolitical risk are positively related with financial stress total connectedness.

Suggested Citation

  • Zhu, Sha & Xia, Yuqin & Li, Qiuxuan & Chen, Yunjia, 2025. "Global geopolitical risk and financial stability: Evidence from China," Finance Research Letters, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324015307
    DOI: 10.1016/j.frl.2024.106501
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324015307
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2024.106501?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:72:y:2025:i:c:s1544612324015307. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.