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Article
Publication date: 28 November 2022

Kazi Sohag, Md Monirul Islam, Ivana Tomas Žiković and Hoda Mansour

The study's objective is to measure the response of the food prices to the aggregate and disaggregate geopolitical risk events, Russia's geopolitical risks and global…

Abstract

Purpose

The study's objective is to measure the response of the food prices to the aggregate and disaggregate geopolitical risk events, Russia's geopolitical risks and global energy prices in the context of two European regions, i.e. Eastern and Western Europe covering the monthly data from January 2001 to March 2022.

Design/methodology/approach

The authors apply a novel and sophisticated econometric method, the cross-quantilogram (CQ) approach, to analyse the authors’ monthly data properties. This method detects the causal relationship between the variables under the bi-variate modelling approach. More importantly, the CQ procedure divulges the bearish and bullish states of the causal association between the variables under short, medium and long memories.

Findings

The authors find that aggregate measures of geopolitical risk reduce food prices in the short term in the Eastern Europe but increases food prices in the Western Europe. Besides, the decomposed measures of geopolitical risk “threats” and “acts” have heterogeneous effects on the food prices. More importantly, Russia's geopolitical risk events and global energy prices enhance the food inflation under long memory.

Research limitations/implications

The authors provide diverse policy implications for Eastern and Western Europe based on the authors’ findings. First, the European policymakers should take concrete and joint policy measures to tackle the detrimental effects of geopolitical risks to bring stability to the food markets. Second, this region should emphasize utilizing their unused agricultural lands to grow more crops to avoid external dependence on food. Third, the European Union and its partners should begin global initiatives to help smallholder farmers because of their contribution to the resilience of disadvantaged, predominantly rural communities. Fourth, geopolitically affected European countries like Ukraine should deal with a crippled supply chain to safeguard their production infrastructure. Fifth, fuel (oil) scarcity in the European region due to the Russia-Ukraine war should be mitigated by searching for alternative sources (countries) for smooth food transportation for trade. Finally, as Europe and its Allies impose new sanctions in response to the Russia-Ukraine war, it can have immediate and long-run disastrous consequences on the European and the global total food systems. In this case, all European blocks mandate cultivating stratagems to safeguard food security and evade a long-run cataclysm with multitudinous geopolitical magnitudes for European countries and the rest of the world.

Originality/value

This is the maiden study that considers the aggregated and disaggregated measures of the geopolitical risk events, Russia's geopolitical risks and global energy prices and delves into these dynamics' effects on food prices. Notably, linking the context of the Russia-Ukraine war is a significant value addition to the existing piece of food literature.

Article
Publication date: 2 October 2019

Peter Buell Hirsch

The purpose of this paper is to examine how changes in the global geopolitical climate have created new and more acute reputation risks for multinational corporations.

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Abstract

Purpose

The purpose of this paper is to examine how changes in the global geopolitical climate have created new and more acute reputation risks for multinational corporations.

Design/methodology/approach

This viewpoint examines recent shifts in the global geopolitical claims covered in international media and analyzes variety of instances in which these shifts have created new and more intense reputation risks. From this analysis, the authors derive insights into how companies can prepare for and manage their operations to mitigate potential reputation risks.

Findings

The author finds that the increases in reputation risk created by shifting global geopolitical structures expose weaknesses in the infrastructure and skill sets by which companies manage their corporate reputation and makes recommendations about overcoming these weaknesses.

Research limitations/implications

The geopolitical issues analyzed and the reputation risks exposed are selective; therefore, this is not a comprehensive review of all the potential risks.

Practical/implications

Companies can do a great deal to protect themselves from new reputation risks created by the geopolitical shifts discussed by setting up a new infrastructure for managing and reporting on these risks and hiring communications professionals with the appropriate capabilities for analyzing and managing the risks.

Social/implications

If these new risks are well managed, the potential for significant business disruption and the safety and security of corporate employees could be significantly reduced.

Originality/value

To the best of the author's knowledge, this is the first discussion of geopolitical shifts and corporate reputation.

Details

Journal of Business Strategy, vol. 40 no. 6
Type: Research Article
ISSN: 0275-6668

Keywords

Open Access
Article
Publication date: 3 July 2021

Faik Bilgili, Fatma Ünlü, Pelin Gençoğlu and Sevda Kuşkaya

This paper aims to investigate the pass-through (PT) effect in Turkey by using quarterly data for the period 1998: Q1-2019: Q2 to understand the dynamic potential effects…

1183

Abstract

Purpose

This paper aims to investigate the pass-through (PT) effect in Turkey by using quarterly data for the period 1998: Q1-2019: Q2 to understand the dynamic potential effects of exchange rates on domestic prices.

Design/methodology/approach

The paper launches several nonlinear models in which the basic determinants of domestic prices in Turkey are determined through Markov regime-switching models (MSMs). Hence, this research follows the variables of the consumer price index (CPI), USD exchange rate, gross domestic product (GDP; demand side of the economy), industrial production index (production side of the economy), economic uncertainty and geopolitical risk index for Turkey.

Findings

This work explores that the exchange rate and demand side of the economy (GDP) follow a positive nonlinear relationship with CPI at both regimes. The production side of the economy (IP) affects negatively the CPI during regime 0. Economic uncertainty influences the CPI positively at Regime 1, while geopolitical risk has a negative association with CPI at Regime 0. Eventually, the paper provides some policy proposals associated with the impacts of GDP, IP, economic uncertainty and geopolitical risk on CPI in Turkey.

Originality/value

One may claim that any PT model, which does not observe the possible structural or regime shifts in estimated parameters, might fail to estimate the coefficients unbiasedly and efficiently. Hence, this work differs from available relevant works in the literature since this paper considers linearity or nonlinearity important and reveals that the relevant PT model follows a nonlinear path rather than a linear path, this nonlinear path is converged strongly by MSMs and estimates the significant regime shifts in the constant term and, in parameters of independent variables of PT by MSMs.

Details

Applied Economic Analysis, vol. 30 no. 88
Type: Research Article
ISSN:

Keywords

Article
Publication date: 11 January 2021

Abdullah Alqahtani, Shawkat Hammoudeh and Refk Selmi

The findings would help in designing useful and relevant hedging strategies against geopolitical risks (GPRs), which are rampant in the Gulf Cooperation Council (GCC) region.

Abstract

Purpose

The findings would help in designing useful and relevant hedging strategies against geopolitical risks (GPRs), which are rampant in the Gulf Cooperation Council (GCC) region.

Design/methodology/approach

This study focuses on the regional and global costs of GPRs for businesses in the Gulf region.

Findings

The results of the analysis show that the time-varying conditional correlation between the stock returns of the GCC countries and the Saudi Arabian geopolitical risk is consistently negative, suggesting that the Saudi Arabian geopolitical risk hurts the GCC stock markets, thus underscoring the importance of studying regional GPRs.

Originality/value

The contribution of this paper is twofold: First, it uses a newly geopolitical risk index that includes recent geopolitical events not included in the Caldara and Iacoviello (2018) index. In addition to war threats and acts, terrorist threats and acts and nuclear threats, the authors consider global trade tensions (GTTs), Saudi Arabia's geopolitical risk and OPEC news mainly related to OPEC oil production levels. Second, it assesses whether Saudi Arabia, which is the largest economy in the region and the main global oil exporter, is really a risk exporter to the rest of the GCC countries.

Details

Review of Behavioral Finance, vol. 14 no. 2
Type: Research Article
ISSN: 1940-5979

Keywords

Book part
Publication date: 22 July 2021

Thomas C. Chiang and Xi Chen

This study finds evidence that a stock return is inversely correlated with downside risk, confirming a pattern of risk-aversion behavior. Evidence from testing a stock…

Abstract

This study finds evidence that a stock return is inversely correlated with downside risk, confirming a pattern of risk-aversion behavior. Evidence from testing a stock return's response to a change in economic policy uncertainty indicates a significantly negative effect in the Chinese stock market; this conclusion holds true for testing the impacts of changes in fiscal and monetary policy uncertainties. However, the data produce a mixed effect for the change in fiscal policy uncertainty. The evidence produced from examining the geopolitical effect on the stock market strongly supports the presence of an adverse effect on stock market performance.

Details

Advances in Pacific Basin Business, Economics and Finance
Type: Book
ISBN: 978-1-80043-870-5

Keywords

Article
Publication date: 6 May 2020

Samuel Roscoe, Heather Skipworth, Emel Aktas and Farooq Habib

This paper examines how firms of different sizes formulate and implement strategies to achieve fit with an external environment disrupted by a geopolitical event. The…

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Abstract

Purpose

This paper examines how firms of different sizes formulate and implement strategies to achieve fit with an external environment disrupted by a geopolitical event. The context of the study is the pharmaceutical industry and how it managed the supply chain uncertainty created by the United Kingdom's decision to leave the European Union, or Brexit.

Design/methodology/approach

Data were collected longitudinally from the pro-Brexit vote on 23 June 2016, until the UK’s departure from the EU on 31 January 2020. Twenty-seven interviews were conducted in the pharmaceutical sector, including nineteen interviews with senior managers at eight case companies and eight interviews with experts working for trade associations and standards institutes. The interview findings were triangulated with Brexit policy and strategy documentation.

Findings

When formulating strategy, multi-national enterprises (MNEs) used worst case assumptions, while large firms, and small and medium sized enterprises (SMEs) gathered knowledge as part of a “wait-and-see” strategy, allowing them to reduce perceptions of heightened supply chain uncertainty. Firms then implemented reactive and/or proactive strategies to mitigate supply chain risks.

Originality/value

The study elaborates on strategic contingency theory by identifying two important conditions for achieving strategic fit: first, companies deploy intangible resources, such as management time, to gather information and reduce perceptions of heightened supply chain uncertainty. Second, companies deploy tangible resources (supply chain redundancies, new supply chain assets) to lessen the negative outcomes of supply chain risks. Managers are provided with an empirical framework for mitigating supply chain uncertainty and risk originating from geopolitical disruptions.

Details

International Journal of Operations & Production Management, vol. 40 no. 9
Type: Research Article
ISSN: 0144-3577

Keywords

Abstract

Details

Energy Economics
Type: Book
ISBN: 978-1-83867-294-2

Book part
Publication date: 3 September 2021

Leticia Bollain-Parra, Oscar V. De la Torre-Torres, Dora Aguilasocho-Montoya and María de la Cruz del Río-Rama

In this work, we estimated the impact that the US VIX, economic policy and epidemic uncertainty indexes had on leisure and recreation stocks. We extended the current…

Abstract

In this work, we estimated the impact that the US VIX, economic policy and epidemic uncertainty indexes had on leisure and recreation stocks. We extended the current literature in two ways: first, we estimated the smoothed probabilities of being in ‘normal’ ( s = 1 ), ‘distress’ ( s = 2 ) and ‘crisis’ ( s = 3 ) episodes in the Refinitiv global leisure and recreation index. Then, we estimated the influence that the VIX and uncertainty indexes had on the generation of distress and crisis episodes in these stocks. By using logit regressions, we found out that only the US Economic policy uncertainty index is a detonator of distress and crisis episodes. We also found that the pandemic (COVID-19) news uncertainty has no significant and direct influence on the smoothed probabilities. Finally, and complementary to the current literature, we found that the volatility spillover effect from the S&P 500 to these stocks generates extreme volatility (crisis) episodes. Our results could be of use for practitioners and scholars and could provide a model to forecast distress and crisis episodes among leisure and recreation stocks. This model could be used for potential portfolio management or economic (tourism) policy purposes.

Article
Publication date: 24 August 2020

Hechem Ajmi and Nadia Arfaoui

This paper aims to investigate the effect of the political risk on Bitcoin return and volatility during the 2016 US pre-election and post-election periods.

Abstract

Purpose

This paper aims to investigate the effect of the political risk on Bitcoin return and volatility during the 2016 US pre-election and post-election periods.

Design/methodology/approach

A daily composite political risk index is calculated by using the principal component analysis and Google Trends. A quantile regression approach is adopted to assess the effect of the political risk index on Bitcoin return and volatility for both periods subject to market conditions.

Findings

Findings reveal that the political risk index tends to increase when moving from the pre-election period to the post-election one. This is mostly attributed to the new challenges faced by the new elected government. During the pre-election period, the quantiles regression shows that the political risk index negatively affects Bitcoin return when the market is bearish, whereas a positive impact on volatility is found in bearish and bullish markets. When the political situation becomes severer during the post-election period, the quantiles plots show that the increase of the political risk index leads to a significant increase of Bitcoin return, whereas Bitcoin volatility remains relatively stable. This means that Bitcoin can be adopted as a hedging tool when the political situation becomes severer.

Originality/value

Comparing to the existed studies in the field, this paper considers Google trends as a main source to assess the daily composite political risk index during the 2016 US presidential election.

Details

Journal of Financial Economic Policy, vol. 13 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

Book part
Publication date: 22 November 2017

Guilherme Fráguas Nobre

This chapter focuses on the role played by both companies and universities on the dissemination of services and courses related to Business Diplomacy (BD). Special…

Abstract

Purpose

This chapter focuses on the role played by both companies and universities on the dissemination of services and courses related to Business Diplomacy (BD). Special attention is given to the partnerships between companies and universities and to how BD is taught by universities around the world.

Design/methodology/approach

With an exploratory analysis technique, we have surveyed the websites of 22 companies and 20 universities and institutions, belonging to various countries, engaged in activities related to BD (i.e. services supply, courses at different stages of the academic curricula, workshops, seminars, training etc.).

Findings

The objective of the analysis was twofold: first, to give a better understanding of the concept of BD and of the various meanings associated with it; the results indicate that in both cases the practiced concept of BD is converging to the canonical set of diplomatic functions; second, to offer useful insights to practitioners in the field of BD by looking at the type of BD courses covered by the academic curricula of various universities and BD services offered by market companies.

Originality/value

This chapter presents a comprehensive analysis of the BD issue, going beyond its treatment as a mere auxiliary activity. It also offers a detailed overview of diplomacy’s main functions and adjuvant activities, with the purpose of advancing organisational charts’ structures inside companies, and academic syllabi offerings by universities.

Details

International Business Diplomacy
Type: Book
ISBN: 978-1-78743-081-5

Keywords

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