Do the emerging stock markets react to international economic policy uncertainty, geopolitical risk and financial stress alike?

Das, Debojyoti; Kannadhasan, M.; Bhattacharyya, Malay

doi:10.1016/j.najef.2019.01.008

Cited by 181 publications

(80 citation statements)

References 51 publications

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“…Sharifpour, Walters, and Ritchie (2013) and Morakabati and Kapu sci nski (2016) opine that risk appetite varies across tourist groups, from allocentric to psychocentric, and is mainly determined by the personality traits of tourists and the uniqueness of the destination. Das, Kannadhasan, and Bhattacharyya (2019), in their study, infer that geopolitical risk is an influential indicator of economic market reaction to shocks or volatility. Balcilar, Bonato, Demirer, and Gupta (2018) further buttress this notion and assert that geopolitical risk is the major factor affecting business cycles, financial markets, and economic directions.…”

Section: Tourism and Geopolitical Riskmentioning

confidence: 98%

Geopolitical risk and tourism: Evidence from dynamic heterogeneous panel models

Lee

Olasehinde‐Williams

Akadırı³

2020

Journal of Tourism Research

117

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This paper provides an empirical insight into how geopolitical risks impact international tourism demand. An augmented tourism demand function was developed and empirically estimated in line with classical theory for a panel of 16 countries from 2005M1 to 2017M12 through the AMG and CCEMG estimation techniques that address underlying heterogeneity, non‐stationarity, and cross‐sectional dependence. The study further examines the potential moderating effect of covid‐19 outbreak on the relationship between geopolitical risk and tourism by investigating the interactive effect of past outbreaks and geopolitical risks on tourism demand. Additional insight on causal relations between geopolitical risks and tourism demand was obtained using panel bootstrapping technique. The results show that geopolitical risk negatively impacts tourism demand, and that pandemic outbreaks aggravate the negative impact of geopolitical risks on tourism demand. Panel causality outcomes further confirm that geopolitical risk is a significant predictor of tourism demand (captured by either tourism receipts or number of inbound tourists). Our findings confirm that the dynamic attributes of both local and international political environments significantly impact the consumption decision of tourists and the economic performance of tourist destinations. Our recommendation is that pre‐crisis, in proposing policy directions for tourism sector development, policy‐makers should establish crisis management plans to protect the tourism sector. Post‐crisis, policy‐makers should initiate aggressive recovery marketing strategies to re‐establish the image of safety and attractiveness required to reassure potential tourists of the safety of the destination, thereby ensuring return to competitiveness and economic recovery.

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Section: Tourism and Geopolitical Riskmentioning

confidence: 98%

Geopolitical risk and tourism: Evidence from dynamic heterogeneous panel models

Lee

Olasehinde‐Williams

Akadırı³

2020

Journal of Tourism Research

117

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“…economic growth (Baker et al 2016) and at micro level, i.e. corporate investments (Akron et al 2020, Gulen andIon 2015) , corporate innovation (He et al 2020, Xu 2020), household consumption (Aaberge et al 2017, Levenko 2020) and stock market (Arouri et al 2016, Das et al 2019. In all, uncertainty reshapes the environment in which the economic entities operate.…”

Section: Theoretical Background and Hypothesismentioning

confidence: 99%

How Does Economic Policy Uncertainty Affect CO2 Emissions? A Regional Analysis in China

Liu

Zhang

2021

Preprint

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More recently, the COVID-19 pandemic outbreak has created massive economic policy uncertainty (EPU). EPU and its economic fallout have been a hot topic of study, however, the impact of EPU on CO2 emissions has been seldom addressed to date. This paper investigates the direct impact of the EPU on CO2 emissions and indirect effect via the environmental regulation at the national and regional levels using the panel data model and provincial panel data from 2003 to 2017 in China. The empirical results show that the central region is the most special one, which all explanatory variables except energy consumption are all non-significant even at the 10% level. For other samples, there is a significant positive correlation between EPU and CO2 emissions, whether in the national or regional level. Additionally, environmental regulation alone can achieve the purpose of curtailing carbon emissions. However, when the EPU is taken into consideration, environmental regulation exerts a significantly positive effect on CO2 emissions, leading to unintended increase in emissions. Moreover, the Environmental Kuznets Curve (EKC) hypothesis was confirmed in the national and eastern samples, while CO2 emissions increase monotonically as economic level grows for western datasets. Based on the overall findings, some policy implications were put forward.

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“…Today, as the worldwide politics and economics changes, especially the pandemic outbreak of the COVID-19 has created massive economic uncertainty (Baker et al 2020 ; Jordà et al 2020 ), the importance of the EPU becomes increasingly visible. EPU has a dampening impact both at the macro-level, i.e., economic growth (Baker et al 2013a ; Baker et al 2016 ; Baker et al 2020 ), and at the micro-level, i.e., corporate investments (Akron et al 2020 ; Gulen and Ion 2016 ), corporate innovation (He et al 2020 ; Xu 2020 ), household consumption (Aaberge et al 2017 ; Levenko 2020 ), and stock market (Arouri et al 2016 ; Das et al 2019 ). In all, uncertainty reshapes the environment in which the economic entities operate.…”

Section: Introductionmentioning

confidence: 99%

How does economic policy uncertainty affect CO2 emissions? A regional analysis in China

Liu

Zhang

2021

Environ Sci Pollut Res

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More recently, the COVID-19 pandemic outbreak has created massive economic policy uncertainty (EPU). EPU and its economic fallout have been a hot topic of study; however, the impact of EPU on CO 2 emissions has been seldom addressed to date. This paper investigates the effects of the EPU on CO 2 emissions. It elucidates the role of EPU in moderating the environmental regulation-CO 2 emissions nexus at the national and regional levels using the panel data model and provincial panel data from 2003 to 2017 in China. The main empirical results are as follows. The EPU has a negative impact on carbon emissions; however, this relationship is non-significant even at the 10% level in the central and western region datasets. Environmental regulation positively increases the CO 2 emissions implying that the green paradox occurs in the whole and western regions datasets. From the perspective of the moderating effect of uncertainty, EPU exerts a positive impact upon the environmental regulation-CO 2 emissions nexus in the whole and western region datasets. The moderating effect is not significant in the eastern and central regions. The results demonstrate that the re-examination of the EKC hypothesis is inconclusive. Kuznets relationship between economic growth and CO 2 emissions for the national, eastern, and central samples was confirmed. In contrast, CO 2 emissions monotonically rise as GDP grows for western datasets. Based on the overall findings, some policy implications were put forward. We recommend that the local government should consider EPU to improve the institutional environment. Further, different regions should implement various environmental policies according to regional conditions maximizing the emission reduction potential.

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Do the emerging stock markets react to international economic policy uncertainty, geopolitical risk and financial stress alike?

Cited by 181 publications

References 51 publications

Geopolitical risk and tourism: Evidence from dynamic heterogeneous panel models

Geopolitical risk and tourism: Evidence from dynamic heterogeneous panel models

How Does Economic Policy Uncertainty Affect CO2 Emissions? A Regional Analysis in China

How does economic policy uncertainty affect CO2 emissions? A regional analysis in China

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