IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v83y2023ics0301420723003847.html
   My bibliography  Save this article

Energy security analysis in a geopolitically volatile world: A causal study

Author

Listed:
  • Khan, Khalid
  • Khurshid, Adnan
  • Cifuentes-Faura, Javier

Abstract

The study evaluates the causal nexus between geopolitical risk and energy security from 2004 to 2022. The results of the full sample causality indicate bidirectional causality between geopolitical risk and energy security. Moreover, the results suggest that geopolitical risk significantly impacts energy security in different sub-samples driven by the economic crisis, conflicts between nations, political instability, and terrorism, which have caused energy supply disruptions and increased energy insecurity. On the other hand, the result shows that energy security impacts geopolitical risk caused by economic instability and political unrest resulting from energy insecurity. Our model supports the results, demonstrating that geopolitical risk and energy security are closely intertwined and can have direct and indirect effects on each other. Energy security can be improved through energy diversification, investing in clean energy, building resilient energy infrastructure and promoting the peaceful resolution of conflicts.

Suggested Citation

  • Khan, Khalid & Khurshid, Adnan & Cifuentes-Faura, Javier, 2023. "Energy security analysis in a geopolitically volatile world: A causal study," Resources Policy, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:jrpoli:v:83:y:2023:i:c:s0301420723003847
    DOI: 10.1016/j.resourpol.2023.103673
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723003847
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.103673?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.

    References listed on IDEAS

    as
    1. Pesaran, M. Hashem & Timmermann, Allan, 2005. "Small sample properties of forecasts from autoregressive models under structural breaks," Journal of Econometrics, Elsevier, vol. 129(1-2), pages 183-217.
    2. Dario Caldara & Matteo Iacoviello, 2022. "Measuring Geopolitical Risk," American Economic Review, American Economic Association, vol. 112(4), pages 1194-1225, April.
    3. Ehsan Rasoulinezhad & Farhad Taghizadeh-Hesary & Jinsok Sung & Nisit Panthamit, 2020. "Geopolitical Risk and Energy Transition in Russia: Evidence from ARDL Bounds Testing Method," Sustainability, MDPI, vol. 12(7), pages 1-17, March.
    4. Floros Flouros & Victoria Pistikou & Vasilios Plakandaras, 2022. "Geopolitical Risk as a Determinant of Renewable Energy Investments," Energies, MDPI, vol. 15(4), pages 1-21, February.
    5. Su, Chi-Wei & Khan, Khalid & Tao, Ran & Nicoleta-Claudia, Moldovan, 2019. "Does geopolitical risk strengthen or depress oil prices and financial liquidity? Evidence from Saudi Arabia," Energy, Elsevier, vol. 187(C).
    6. Abdelrahman Azzuni & Christian Breyer, 2018. "Definitions and dimensions of energy security: a literature review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 7(1), January.
    7. Su, Chi-Wei & Khan, Khalid & Umar, Muhammad & Zhang, Weike, 2021. "Does renewable energy redefine geopolitical risks?," Energy Policy, Elsevier, vol. 158(C).
    8. Andrews, Donald W K & Ploberger, Werner, 1994. "Optimal Tests When a Nuisance Parameter Is Present Only under the Alternative," Econometrica, Econometric Society, vol. 62(6), pages 1383-1414, November.
    9. Balcilar, Mehmet & Ozdemir, Zeynel Abidin & Arslanturk, Yalcin, 2010. "Economic growth and energy consumption causal nexus viewed through a bootstrap rolling window," Energy Economics, Elsevier, vol. 32(6), pages 1398-1410, November.
    10. R. Scott Hacker & Abdulnasser Hatemi-J, 2006. "Tests for causality between integrated variables using asymptotic and bootstrap distributions: theory and application," Applied Economics, Taylor & Francis Journals, vol. 38(13), pages 1489-1500.
    11. Scholten, Daniel & Bazilian, Morgan & Overland, Indra & Westphal, Kirsten, 2020. "The geopolitics of renewables: New board, new game," Energy Policy, Elsevier, vol. 138(C).
    12. Vakulchuk, Roman & Overland, Indra & Scholten, Daniel, 2020. "Renewable energy and geopolitics: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 122(C).
    13. Ulviyye Aydin & Dina Azhgaliyeva, 2019. "Assessing Energy Security In The Caspian Region: The Geopolitical Implications To European Energy Strategy," World Scientific Book Chapters, in: Farhad Taghizadeh-Hesary & Naoyuki Yoshino & Youngho Chang & Aladdin D Rillo (ed.), Achieving Energy Security in Asia Diversification, Integration and Policy Implications, chapter 9, pages 257-290, World Scientific Publishing Co. Pte. Ltd..
    14. Ronnie Figueiredo & Mohammad Soliman & Alamir N. Al-Alawi & Maria José Sousa, 2022. "The Impacts of Geopolitical Risks on the Energy Sector: Micro-Level Operative Analysis in the European Union," Economies, MDPI, vol. 10(12), pages 1-12, November.
    15. Jun Wen & Xinxin Zhao & Quan-Jing Wang & Chun-Ping Chang, 2021. "The impact of international sanctions on energy security," Energy & Environment, , vol. 32(3), pages 458-480, May.
    16. Cai, Yifei & Wu, Yanrui, 2021. "Time-varying interactions between geopolitical risks and renewable energy consumption," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 116-137.
    17. Khan, Khalid & Su, Chi-Wei & Zhu, Meng Nan, 2022. "Examining the behaviour of energy prices to COVID-19 uncertainty: A quantile on quantile approach," Energy, Elsevier, vol. 239(PE).
    18. Ghazi Shukur & Panagiotis Mantalos, 2000. "A simple investigation of the Granger-causality test in integrated-cointegrated VAR systems," Journal of Applied Statistics, Taylor & Francis Journals, vol. 27(8), pages 1021-1031.
    19. Andrews, Donald W K, 1993. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Econometrica, Econometric Society, vol. 61(4), pages 821-856, July.
    20. Karatayev, Marat & Hall, Stephen, 2020. "Establishing and comparing energy security trends in resource-rich exporting nations (Russia and the Caspian Sea region)," Resources Policy, Elsevier, vol. 68(C).
    21. Khalid Khan & Chi-Wei Su & Ran Tao, 2021. "Does Oil Prices Cause Financial Liquidity Crunch? Perspective from Geopolitical Risk," Defence and Peace Economics, Taylor & Francis Journals, vol. 32(3), pages 312-324, April.
    22. Su, Chi-Wei & Khan, Khalid & Tao, Ran & Umar, Muhammad, 2020. "A review of resource curse burden on inflation in Venezuela," Energy, Elsevier, vol. 204(C).
    23. Getao Hu & Jun Yang & Jun Li, 2022. "The Dynamic Evolution of Global Energy Security and Geopolitical Games: 1995~2019," IJERPH, MDPI, vol. 19(21), pages 1-25, November.
    24. Achim Zeileis & Friedrich Leisch & Christian Kleiber & Kurt Hornik, 2005. "Monitoring structural change in dynamic econometric models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 99-121, January.
    25. Khan, Khalid & Su, Chi-Wei & Rehman, Ashfaq U., 2021. "Do multiple bubbles exist in coal price?," Resources Policy, Elsevier, vol. 73(C).
    26. Griffiths, Steven, 2017. "A review and assessment of energy policy in the Middle East and North Africa region," Energy Policy, Elsevier, vol. 102(C), pages 249-269.
    27. Khan, Khalid & Su, Chi Wei & Khurshid, Adnan, 2022. "Do booms and busts identify bubbles in energy prices?," Resources Policy, Elsevier, vol. 76(C).
    28. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    29. Ang, B.W. & Choong, W.L. & Ng, T.S., 2015. "Energy security: Definitions, dimensions and indexes," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 1077-1093.
    30. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-144, January.
    31. Mehmet Balcilar & Zeynel Ozdemir, 2013. "The export-output growth nexus in Japan: a bootstrap rolling window approach," Empirical Economics, Springer, vol. 44(2), pages 639-660, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qiang Wang & Fen Ren & Rongrong Li, 2024. "Geopolitics and energy security: a comprehensive exploration of evolution, collaborations, and future directions," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-26, December.
    2. Khan, Khalid & Su, Chi Wei & Khurshid, Adnan & Qin, Meng, 2023. "Does energy security improve renewable energy? A geopolitical perspective," Energy, Elsevier, vol. 282(C).
    3. Halkos, George E. & Aslanidis, Panagiotis – Stavros C., 2023. "Sustainable energy development in an era of geopolitical multi-crisis. Applying productivity indices within institutional framework," Resources Policy, Elsevier, vol. 85(PB).
    4. Sikorska-Pastuszka, Magdalena & Papież, Monika, 2023. "Dynamic volatility connectedness in the European electricity market," Energy Economics, Elsevier, vol. 127(PA).
    5. Karolina Czerwińska & Andrzej Pacana, 2024. "Analysis of Energy Security Based on Level of Alignment with the Goals of Agenda 2030," Energies, MDPI, vol. 17(12), pages 1-30, June.
    6. Zhang, Bin & Liu, Zuyao & Wang, Zhaohua & Zhang, Shuang, 2023. "The impact of geopolitical risk on energy security: Evidence from a GMM panel VAR approach," Resources Policy, Elsevier, vol. 86(PB).
    7. Lv Chen & Lingying Pan & Kaige Zhang, 2024. "The Dynamic Cointegration Relationship between International Crude Oil, Natural Gas, and Coal Price," Energies, MDPI, vol. 17(13), pages 1-14, June.
    8. Khurshid, Adnan & Khan, Khalid & Rauf, Abdur & Cifuentes-Faura, Javier, 2024. "Effect of geopolitical risk on resources prices in the global and Russian-Ukrainian context: A novel Bayesian structural model," Resources Policy, Elsevier, vol. 88(C).
    9. Khurshid, Adnan & Khan, Khalid & Cifuentes-Faura, Javier & Chen, Yufeng, 2024. "Asymmetric multifractality: Comparative efficiency analysis of global technological and renewable energy prices using MFDFA and A-MFDFA approaches," Energy, Elsevier, vol. 289(C).
    10. Khurshid, Adnan & Chen, Yufeng & Rauf, Abdur & Khan, Khalid, 2023. "Critical metals in uncertainty: How Russia-Ukraine conflict drives their prices?," Resources Policy, Elsevier, vol. 85(PB).
    11. Khurshid, Adnan & Huang, Yupei & Cifuentes-Faura, Javier & Khan, Khalid, 2024. "Beyond borders: Assessing the transboundary effects of environmental regulation on technological development in Europe," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    12. Khan, Khalid & Khurshid, Adnan & Cifuentes-Faura, Javier, 2023. "Investigating the relationship between geopolitical risks and economic security: Empirical evidence from central and Eastern European countries," Resources Policy, Elsevier, vol. 85(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Khan, Khalid & Khurshid, Adnan & Cifuentes-Faura, Javier & Xianjun, Dai, 2024. "Does renewable energy development enhance energy security?," Utilities Policy, Elsevier, vol. 87(C).
    2. Khan, Khalid & Su, Chi Wei & Khurshid, Adnan & Qin, Meng, 2023. "Does energy security improve renewable energy? A geopolitical perspective," Energy, Elsevier, vol. 282(C).
    3. Wang, Kai-Hua & Wen, Cui-Ping & Liu, Hong-Wen & Liu, Lu, 2023. "Promotion or hindrance? Exploring the bidirectional causality between geopolitical risk and green bonds from an energy perspective," Resources Policy, Elsevier, vol. 85(PB).
    4. Kai-Hua Wang & Jia-Min Kan & Cui-Feng Jiang & Chi-Wei Su, 2022. "Is Geopolitical Risk Powerful Enough to Affect Carbon Dioxide Emissions? Evidence from China," Sustainability, MDPI, vol. 14(13), pages 1-16, June.
    5. Xiao-lin Li & Mehmet Balcilar & Rangan Gupta & Tsangyao Chang, 2016. "The Causal Relationship Between Economic Policy Uncertainty and Stock Returns in China and India: Evidence from a Bootstrap Rolling Window Approach," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(3), pages 674-689, March.
    6. Yingying Xu & Zhi-Xin Liu & Hsu-Ling Chang & Adelina Dumitrescu Peculea & Chi-Wei Su, 2017. "Does self-fulfilment of the inflation expectation exist?," Applied Economics, Taylor & Francis Journals, vol. 49(11), pages 1098-1113, March.
    7. Su, Chi-Wei & Khan, Khalid & Umar, Muhammad & Zhang, Weike, 2021. "Does renewable energy redefine geopolitical risks?," Energy Policy, Elsevier, vol. 158(C).
    8. Feng-Li Lin & Mei-Chih Wang & Hsien-Hung Kung, 2020. "Housing and Stock Market Nexus in the US," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 114-130.
    9. Adnan Khurshid & Yin Kedong & Adrian Cantemir Calin & Khalid Khan, 2017. "The Effects of Workers’ Remittances on Exchange Rate Volatility and Exports Dynamics - New Evidence from Pakistan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 20(63), pages 29-52, March.
    10. Su, Chi-Wei & Wang, Xiao-Qing & Tao, Ran & Chang, Hsu-Ling, 2019. "Does money supply drive housing prices in China?," International Review of Economics & Finance, Elsevier, vol. 60(C), pages 85-94.
    11. Khalid Khan & Jiluo Sun & Sinem Derindere Koseoglu & Ashfaq U. Rehman, 2021. "Revisiting Bitcoin Price Behavior Under Global Economic Uncertainty," SAGE Open, , vol. 11(3), pages 21582440211, August.
    12. Chi-Wei Su & Jiao-Jiao Fan & Hsu-Ling Chang & Xiao-Lin Li, 2016. "Is there Causal Relationship between Money Supply Growth and Inflation in China? Evidence from Quantity Theory of Money," Review of Development Economics, Wiley Blackwell, vol. 20(3), pages 702-719, August.
    13. David Su & Xin Li & Oana-Ramona Lobonþ & Yanping Zhao, 2016. "Economic policy uncertainty and housing returns in Germany: Evidence from a bootstrap rolling window," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 34(1), pages 43-61.
    14. Ming-Hsien YANG & Chih-She WU, 2015. "Revisit Export and GDP Nexus in China and Taiwan: A Rolling Window Granger Causality Test," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(604), A), pages 75-92, Autumn.
    15. Jing-Ping Li & Jiao-Jiao Fan & Chi-Wei Su & Oana-Ramona Lobonţ, 2017. "Investment coordinates in the context of housing and stock markets nexus," Applied Economics Letters, Taylor & Francis Journals, vol. 24(20), pages 1455-1463, November.
    16. Chi Wei Su & Zhi-Feng Wang & Rui Nian & Yanping Zhao, 2017. "Does international capital flow lead to a housing boom? A time-varying evidence from China," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(7), pages 851-864, October.
    17. repec:agr:journl:v:3(604):y:2015:i:3(604):p:75-92 is not listed on IDEAS
    18. Liu, Fangying & Su, Chi Wei & Qin, Meng & Lobonţ, Oana-Ramona, 2023. "Winner or loser? The bidirectional impact between geopolitical risk and energy transition from the renewable energy perspective," Energy, Elsevier, vol. 283(C).
    19. Chiwei Su & Yingying Xu & Hsu Ling Chang & Oana-Ramona Lobont & Zhixin Liu, 2020. "Dynamic Causalities between Defense Expenditure and Economic Growth in China: Evidence from Rolling Granger Causality Test," Defence and Peace Economics, Taylor & Francis Journals, vol. 31(5), pages 565-582, July.
    20. Khan, Khalid & Su, Chi Wei & Rehman, Ashfaq U. & Ullah, Rahman, 2022. "Is technological innovation a driver of renewable energy?," Technology in Society, Elsevier, vol. 70(C).
    21. Nyakabawo, Wendy & Miller, Stephen M. & Balcilar, Mehmet & Das, Sonali & Gupta, Rangan, 2015. "Temporal causality between house prices and output in the US: A bootstrap rolling-window approach," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 55-73.

    More about this item

    Keywords

    Geopolitical risk; Energy security; Supply disruption; Energy prices; Political instability;
    All these keywords.

    JEL classification:

    • F01 - International Economics - - General - - - Global Outlook
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

    Statistics

    Access and download statistics

    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:jrpoli:v:83:y:2023:i:c:s0301420723003847. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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/inca/30467 .

    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.