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

Soybilgen B., KAYA H. , Dedeoglu D.

ECONOMICS BULLETIN, cilt.39, ss.717-725, 2019 (ESCI İndekslerine Giren Dergi)

  • Cilt numarası: 39 Konu: 1
  • Basım Tarihi: 2019
  • Dergi Adı: ECONOMICS BULLETIN
  • Sayfa Sayısı: ss.717-725

Özet

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.