THE IMPACT OF GLOBAL ECONOMIC, POLITICAL AND GEOPOLITICAL RISKS ON INDIVIDUAL AND CORPORATE FINANCIAL TRANSACTIONS

Year 2024, , 645 - 667, 16.04.2024

Serkan Demirel

https://doi.org/10.17755/esosder.1372282

Abstract

This study aims to observe the effects of global economic and political risk and geopolitical risk on individual and corporate financial transactions. In the study, "Global Economic and Political Risk Index" and "Geopolitical Risk Index" variables are selected as independent variables, while "Number of Individuals who have defaulted on Personal Loans", "Number of Bad Checks", "Number of Individuals who have defaulted on Personal Credit Cards" and "Number of Protested Promissory Notes" variables are selected as dependent variables. In this sense, the time series subject to the study cover the 43-quarter period between the 3rd quarter of 2012 and the 1st quarter of 2023. The ADF (Augmented Dickey-Fuller) unit root test, which is frequently used in the literature, is used for the stationarity test. Four separate ARDL models are used to examine the relationships. The VAR model is used to determine the optimal lag length for endogenous and exogenous variables in the ARDL model. The bounds test was used to determine the long-run relationship between the variables. According to the findings of the research, the Number of Individual Loan Defaulters is not affected by the Global Economic and Political Risk Index and the Geopolitical Risk Index in both the long and short run; the Number of Individuals with Bad Checks is positively related to the Global Economic and Political Risk Index in the short run and negatively related to it in the long run; Number of Individual Credit Card Debt Defaulters is positively related to the Geopolitical Risk Index in the short run and negatively related to the Global Economic and Political Risk Index in the long run; and Number of Protested Bills is negatively related to the Global Economic and Political Risk Index only in the long run.

Keywords

Global Economic, Political risk, Geopolitical Risk, Retail Financial Transactions, Corporate Financial Transactions.

KÜRESEL EKONOMİK, POLİTİK VE JEOPOLİTİK RİSKLERİN BİREYSEL VE KURUMSAL FİNANSAL İŞLEMLERE ETKİSİ

Abstract

Bu çalışmada bireysel ve kurumsal finansal işlemler üzerinde küresel ekonomik ve politik risk ile jeopolitik riskin etkileri gözlemlenmeye çalışılmıştır. Çalışmada bağımsız değişken olarak “Küresel Ekonomik ve Politik Risk Endeksi” ile “Jeopolitik Risk Endeksi” değişkenleri; bağımlı değişken olarak “Bireysel Kredi Borcunu Ödememiş Gerçek Kişi Sayısı”, “Karşılıksız Çek İşlemi Yapılan Kişi Sayısı”, “Bireysel Kredi Kartı Borcunu Ödememiş Gerçek Kişi Sayısı” ve “Protestolu Senet Sayısı” değişkenleri seçilmiştir. Bu anlamda çalışmaya konu olan zaman serileri 2012 yılının 3. çeyreği ile 2023 yılının 1. çeyreği arasındaki 43 çeyreklik dönemi kapsamaktadır. Çalışmada durağanlık sınaması için literatürde sıklıkla kullanılan ADF (Augmented Dickey-Fuller) birim kök testi kullanılmıştır. İlişkilerin incelenmesi için birbirinden ayrı olarak 4 ayrı ARDL modeli Kullanıştır. ARDL modelinde içsel ve dışsal değişkenler için optimal gecikme uzunluğunun belirlenmesi için VAR modeli kullanılmıştır. Sınır testi ile değişkenler arasındaki uzun dönemli ilişkinin tespiti yapılmıştır. Araştırmanın bulgularına göre; Bireysel kredi borcunu ödememiş gerçek kişi sayısı hem uzun hem de kısa vadede küresel ekonomik ve politik risk endeksi ve jeopolitik risk endeksinden etkilenmemektedir; karşılıksız çek işlemi yapılan kişi sayısı, küresel ekonomik ve politik risk endeksi ile kısa vadede pozitif, uzun vadede ise negatif ilişkilidir; bireysel kredi kartı borcunu ödememiş gerçek kişi sayısı, jeopolitik risk endeksi ile kısa vadede pozitif, küresel ekonomik ve politik risk endeksi ile uzun vadede negatif ilişkilidir ve protestolu senet sayısı, sadece uzun dönemde küresel ekonomik ve politik risk endeksi ile negatif ilişkilidir.

Keywords

Küresel Ekonomi, Politik Risk, Jeopolitik Risk, Bireysel Finansal İşlemler, Kurumsal Finansal İşlemler.

Ethical Statement

etik kurul iznine gerek yoktur.

References

• Abadie, A., & Gardeazabal, J. (2003). The economic costs of conflict: A case study of the Basque Country. American Economic Review, 93(1), 113–132
• Abadie, A., & Gardeazabal, J. (2008). Terrorism and the world economy. European Economic Review, 52(1), 1–27.
• Abdel-Latif, H., & El-Gamal, M. (2019). Antecedents of war: The geopolitics of low oil prices and decelerating financial liquidity. Applied Economics Letters, 26(9), 765–769.
• Adra, S., Gao, Y., Huang, J., & Yuan, J. (2023). Geopolitical risk and corporate payout policy. International Review of Financial Analysis, 87, 102613.
• Al-Mamun, A., SalahUddin, G., Suleman, M. T., & Kang, S. H. (2020). Geopolitical risk, uncertainty and Bitcoin investment. Physica A Statistical Mechanics and its Applications, 540, 123107.
• Apergis, N., Bonato, M., Gupta, R., & Kyei, C. (2017). Does geopolitical risks predict stock returns and volatility of leading defense companies? Evidence from a nonparametric approach. Defence and Peace Economics, 29(6), 684–696.
• Baker, S. R., & Bloom, N. (2013). Does uncertainty reduce growth? Using disasters as natural experiments (No. w19475). National Bureau of Economic Research.
• Baker, S.R., Bloom, N., Davis, S.J., (2016). Measuring economic policy uncertainty. The Quarterly Journal of Economics 131, 1593–1636.
• Beckmann, J., & Czudaj, R. (2017). Exchange rate expectations and economic policy uncertainty. European journal of political economy, 47, 148-162.
• Bekaert, G., Harvey, C. R., Lundblad, C. T., & Siegel, S. (2014). Political risk spreads. Journal of International Business Studies, 45, 471-493.
• Belke, A., & Osowski, T. (2019). International effects of euro area versus US policy uncertainty: A FAVAR approach. Economic inquiry, 57(1), 453-481.
• Berger, T., Grabert, S., & Kempa, B. (2017). Global macroeconomic uncertainty. Journal of Macroeconomics, 53, 42-56.
• Bloom, N. (2009). The impact of uncertainty shocks. Econometrica, 77(3), 623–685.
• Bouoiyour, J., Selmi, R., Hammoudeh, S., & Wohar, M. E. (2019). What are the categories of geopolitical risks that could drive oil prices higher? Acts or threats?. Energy Economics, 84, 104523.
• Brounen, D., & Derwall, J. (2010). The impact of terrorist attacks on international stock markets. European Financial Management, 16(4), 585–598.
• Brown, R. L., Durbin, J., & Evans, J. M. (1975). Techniques for testing the constancy of regression relationships over time. Journal of the Royal Statistical Society Series B: Statistical Methodology, 37(2), 149-163.
• Butler, K. C., & Joaquin, D. C. (1998). A note on political risk and the required return on foreign direct investment. Journal of International Business Studies, 29(3), 599–607.
• Caldara, D., & Iacoviello, M. (2018). Measuring geopolitical risk. In International finance discussion papers 1222.
• Caldara, D., & Iacoviello, M. (2022). Measuring geopolitical risk. American Economic Review, 112(4), 1194-1225.
• Canoz, I. (2022). The Link between Asset Value and Fear Sentiment during Covid-19 Pandemic. Sosyoekonomi, 30(53), 137-153.
• Carney, M. (2016). Uncertainty, the economy and policy.[pdf] London: Bank of England. Available at:[Accessed 24 February 2018].,
• Carrière-Swallow, Y., & Céspedes, L. F. (2013). The impact of uncertainty shocks in emerging economies. Journal of International Economics, 90(2), 316-325.
• Carriero, A., Clark, T. E., & Marcellino, M. (2020). Assessing international commonality in macroeconomic uncertainty and its effects. Journal of Applied Econometrics, 35(3), 273-293.
• Chesney, M., Reshetar, G., & Karaman, M. (2011). The impact of terrorism on financial markets: An empirical study. Journal of Banking and Finance, 35(2), 253–267.
• Crespo Cuaresma, J., Huber, F., & Onorante, L. (2019). The macroeconomic effects of international uncertainty (No. 2302). ECB Working Paper..
• Francis, B. B., Hasan, I., & Zhu, Y. (2014). Political uncertainty and bank loan contracting. Journal of Empirical Finance, 29, 281–286.
• Hemrit, W. (2022). Does insurance demand react to economic policy uncertainty and geopolitical risk? Evidence from Saudi Arabia. The Geneva Papers on Risk and Insurance-Issues and Practice, 47(2), 460-492.
• Khan, K., Su, C. W., & Tao, R. (2021). Does oil prices cause financial liquidity crunch? Perspective from geopolitical risk. Defence and Peace Economics, 32(3), 312-324.
• Lee, C. C., & Lee, C. C. (2020). Insurance activity, real output, and geopolitical risk: Fresh evidence from BRICS. Economic Modelling, 92, 207-215..
• Lee, C. C., Lee, C. C., & Li, Y. Y. (2021). Oil price shocks, geopolitical risks, and green bond market dynamics. The North American Journal of Economics and Finance, 55, 101309.
• Miescu, M. (2019). Uncertainty shocks in emerging economies: a global to local approach for identification.
• Mumtaz, H., & Musso, A. (2021). The evolving impact of global, region-specific, and country-specific uncertainty. Journal of Business & Economic Statistics, 39(2), 466-481.
• Mumtaz, H., & Theodoridis, K. (2017). Common and country specific economic uncertainty. Journal of International Economics, 105, 205-216.
• Olanipekun, I. O., Güngör, H., & Olasehinde-Williams, G. (2019a). Unraveling the causal relationship between economic policy uncertainty and exchange market pressure in BRIC countries: Evidence from bootstrap panel granger causality. Sage Open, 9(2), 2158244019853903.
• Olanipekun, I. O., Olasehinde-Williams, G., & Güngör, H. (2019b). Impact of economic policy uncertainty on exchange market pressure. Sage Open, 9(3), 2158244019876275.
• Olasehinde‐Williams, G. O., & Balcilar, M. (2022). The effect of geopolitical risks on insurance premiums. Journal of Public Affairs, 22(1), e2387.
• Ozturk, E. O., & Sheng, X. S. (2018). Measuring global and country-specific uncertainty. Journal of international money and finance, 88, 276-295.
• Pastor, L., & Veronesi, P. (2012). Uncertainty about government policy and stock prices. The journal of Finance, 67(4), 1219-1264.
• Pástor, Ľ., & Veronesi, P. (2013). Political uncertainty and risk premia. Journal of financial Economics, 110(3), 520-545.
• Pesaran, M. H., & Shin, Y. (1995). An autoregressive distributed lag modelling approach to cointegration analysis (Vol. 9514). Cambridge, UK: Department of Applied Economics, University of Cambridge.
• Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American statistical Association, 94(446), 621-634.
• Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326.
• Pfarrhofer, M. (2023). Measuring international uncertainty using global vector autoregressions with drifting parameters. Macroeconomic Dynamics, 27(3), 770-793.
• Redl, C. (2017). The impact of uncertainty shocks in the United Kingdom. Shen, Y., Shi, X., & Zeng, T. (2017). Global Uncertainty, Macroeconomic Activity and Commodity Price. TBB Risk Merkezi, https://www.riskmerkezi.org/tr/istatistikler/23
• Wang, X., Wu, Y., & Xu, W. (2019). Geopolitical risk and investment. Journal of Money, Credit and Banking, Forthcoming.
• Yalçınkaya, A. A., Şanlisoy, S., & Aydin, Ü. (2016). Türk bankacılık endüstrisinde performansın belirleyenleri ve politik istikrarsızlık ilişkisi. Sosyoekonomi, 24(27), 161-182.
• Yiğit, F., & Canöz, İ. (2021). Determining The Country-Specific Variables Affecting The Market Value of Turkish Eurobonds: NARDL Approach. Yönetim Bilimleri Dergisi, 19(41), 723-744.