Abstract
ABSTRACT Given the high level of economic and financial globalization, geopolitical tensions can disrupt international trade and negatively influence financial markets. China, a global economic power, has been at the center stage of recent geopolitical tensions with widespread economic implications. We empirically investigate the effect of China’s geopolitical risk on Canada’s equity markets. The results show a persistent impact on market returns and volatility, most prominently on the resources and energy sectors. Even though China plays a smaller role than the US as a trading partner, China’s geopolitical risk significantly affects the Canadian stock market and its component sectors. Our results, therefore, support the need for a constructive approach toward alleviating global geopolitical tensions and for the development of geopolitical risk hedging strategies such as insurance and investment in commodities at the country and investor levels.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
