The Structural Transformation of Financial Volatility Spillovers in G20 Economies amid Geopolitical Bloc Formation: Türkiye’s Role

Abstract

This study examines volatility spillovers among G20 financial markets during the 2016–2025 period within the context of intensifying geopolitical competition and financial restructuring in the global economy. The 16 G20 countries analyzed are classified into three groups: the Western Bloc (G7+), representing the core of the global financial architecture; the Emerging Markets Bloc (BRICS+), consisting of rising economic powers; and Türkiye, positioned strategically between these two structures. The study investigates how financial connectedness is shaped not only by economic fundamentals but also by geopolitical alignments, trade networks, and shifts in global power balances. Country-specific conditional volatility series derived from GJR-GARCH models are analyzed within a VAR-X framework incorporating trade-weighted external variables, while financial connectedness is dynamically measured using the Diebold-Yılmaz approach. The findings indicate that, following global shock periods such as the COVID-19 pandemic and the Russia-Ukraine war, financial transmission mechanisms between blocs weakened, whereas financial interactions within BRICS+ strengthened. While the Western Bloc remained a net volatility transmitter, volatility spillover asymmetry between the G7+ and BRICS+ declined. Structural break analyses reveal that regime shifts in financial connectedness coincided with these global shocks. Although Türkiye’s overall position in volatility transmission remained stable, the relative impact of BRICS+-originated volatility shocks increased. The findings suggest that Türkiye functions as a connecting node between geopolitical-economic blocs and that financial integration has been reshaped by changing power configurations in the 21st-century global political economy.

Keywords

• Volatility spillover
• Geopolitical bloc formation
• Financial fragmentation
• G20

Jeopolitik Bloklaşma Sürecinde G20 Ekonomilerinde Finansal Volatilite Yayılımının Yapısal Dönüşümü: Türkiye’nin Rolü

Abstract

Bu çalışma, 2016–2025 döneminde G20 finansal piyasaları arasındaki volatilite yayılımını, küresel ekonomide derinleşen jeopolitik rekabet ve finansal yeniden yapılanma süreci bağlamında incelemektedir. Çalışmada G20’de yer alan 16 ülke; küresel finansal mimarinin merkezini temsil eden Batı Bloğu (G7+), yükselen ekonomik güçlerin oluşturduğu Yükselen Piyasalar Bloğu (BRICS+) ve iki yapı arasındaki ilişkilerde stratejik konuma sahip Türkiye olarak sınıflandırılmıştır. Çalışma, finansal bağlantılılığın yalnızca ekonomik temellerle değil, jeopolitik konumlanmalar, ticaret ağları ve küresel güç dengelerindeki değişimlerle nasıl şekillendiğini analiz etmektedir. Ülke bazında GJR-GARCH modellerinden elde edilen koşullu volatilite serileri, ticaret ağırlıklı dış değişkenleri içeren VAR-X sistemi kapsamında değerlendirilmiş, finansal bağlantılılık yapısı Diebold-Yılmaz yaklaşımıyla dinamik olarak ölçülmüştür. Bulgular, COVID-19 salgını ve Rusya-Ukrayna savaşı gibi küresel şok dönemlerinin ardından bloklar arası finansal aktarım mekanizmalarının zayıfladığını, buna karşılık BRICS+ içindeki finansal etkileşimlerin güçlendiğini göstermektedir. Batı Bloğu net volatilite yayıcısı konumunu korurken, G7+ ve BRICS+ arasındaki aktarım asimetrisinin azaldığı belirlenmiştir. Yapısal kırılım analizleri, finansal bağlantılılıktaki rejim değişimlerinin küresel şok dönemleriyle örtüştüğünü göstermektedir. Türkiye’nin volatilite yayılımındaki konumu büyük ölçüde istikrarlı kalırken, BRICS+ kaynaklı volatilite şoklarının göreli etkisinin arttığı görülmektedir. Bulgular, Türkiye’nin küresel finansal sistemde farklı jeopolitik-ekonomik bloklar arasındaki bağlantı noktalarından biri olduğunu ve 21. yüzyılın değişen küresel ekonomi politiğinde finansal entegrasyonun yeni güç dengeleri doğrultusunda yeniden şekillendiğini ortaya koymaktadır.

Keywords

• Volatilite yayılımı
• jeopolitik bloklaşma
• Finansal parçalanma
• G20

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