How Political and Geopolitical Risks Affect Stock Markets: Empirical Evidence From Emerging Market Economies

Abstract

This study investigates the effects of political and geopolitical risks on stock markets in emerging market economies. A panel data set containing data between the years 2005-2018 was used in the study. Principal Component Analysis (PCA) method, Parks-Kmenta Estimator, and were used as an econometric method. According to the findings, it has been observed that there is a negative and statistically significant relationship between both political risk and geopolitical risk and stock markets. In this context, the findings of this study indicate that high-risk perceptions towards emerging markets economies limit the investments of both domestic and foreign investors in stock markets.

Keywords

• Stock Markets
• Political Risk
• Geopolitical Risk
• Panel Data Analysis

Politik ve Jeopolitik Riskler Hisse Senedi Piyasalarını Nasıl Etkiler: Yükselen Piyasa Ekonomilerinden Ampirik Kanıtlar

Abstract

Bu çalışmada yükselen piyasa ekonomilerinde politik risk ve jeopolitik risklerin hisse senedi piyasaları üzerindeki etkileri araştırılmıştır. Çalışmada 2005-2018 yılları arasındaki verileri içeren panel veri seti kullanılmıştır. Ekonometrik yöntem olarak Temel Bileşenler Analizi (PCA) yöntemi ve Parks-Kmenta Tahmincisi kullanılmıştır. Elde edilen bulgulara göre, politik risk ve jeopolitik risk ile hisse senedi piyasaları arasında negatif ve istatistiki olarak anlamlı bir ilişki olduğu gözlemlenmiştir. Bu bağlamda, bu çalışmanın bulguları, yükselen piyasalar ekonomilerine yönelik yüksek risk algılarının hem yerli hem de yabancı yatırımcıların hisse senedi piyasalarına yapacakları yatırımları sınırlandırdığını ifade etmektedir.

Keywords

• Hisse Senedi Piyasaları
• Politik Risk
• Jeopolitik Risk
• Panel Veri Analizi

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