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


Soybilgen B., KAYA H. , Dedeoglu D.

ECONOMICS BULLETIN, vol.39, no.1, pp.717-725, 2019 (Journal Indexed in ESCI) identifier

  • Publication Type: Article / Article
  • Volume: 39 Issue: 1
  • Publication Date: 2019
  • Title of Journal : ECONOMICS BULLETIN
  • Page Numbers: pp.717-725

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.