Geopolitical Threats Research Articles

Inflation returns. Revisiting the role of external and domestic shocks with Bayesian structural VAR

Following recent exceptional events in the world economy inflation increased remarkably across most countries, reinvigorating the prevalent discussion on the sources of consumer price dynamics. We analyse this issue for the small open economy of Poland by means of the Bayesian structural VAR. The model describes the evolution of eight key macroeconomic variables and is identified with a set of zero and sign restrictions. This framework, applicable also to other small open economies, provides sound economic interpretation of three domestic and five external shocks, of which two are country-specific and the remaining three are purely global. In a robust manner we show that country-specific energy price shocks and global supply shocks mostly determine the recent inflation surge in Poland. We illustrate that inflation response to these two shocks has become markedly more persistent after the outbreak of the Covid-19 pandemic. We also demonstrate that the choice of an inadequate energy prices proxy may result in underestimating the contribution of the energy price shock to inflation, whereas accounting for recent geopolitical threats and other exogenous events does not alter our baseline findings.

Geopolitical risk and the predictability of spillovers between exchange, commodity and stock markets

We utilize the cross-quantilogram method to assess the predictive capacity of geopolitical risk (GPR) on volatility spillovers calculated by the time-varying parameter vector autoregressive model, across international commodity, exchange, and U.S. and Chinese stock markets. The findings yield three notable observations: First, we establish the directional predictive influence of GPR on net and net pairwise volatility spillovers, indicating discernible shifts in the risk roles of specific markets and transmission pathways. Second, these shifts, anticipated by GPR, manifest swiftly within a single day and subside within a quarter, albeit with varying durations contingent on market categories and transmission pathways. Third, disparities are evident in the predictive effectiveness of geopolitical acts and geopolitical threats. These findings remain robust even when considering factors such as economic policy uncertainty, alternative proxies, and other spillover models.

Законодательство о гражданстве Российской Федерации — современный этап развития

The aim of the article is to analyse the main directions of reforming the legislation on Russian citizenship in correlation with the objectives of migration policy of the Russian Federation. The author considers the necessity of overcoming geopolitical threats, integration of new subjects into the Russian Federation, protection of compatriots’ rights, solution of demographic problems, adaptation and integration of migrants into the Russian society as such tasks. It is concluded that the problems of regulation of citizenship issues have become more relevant in connection with the aggravated international situation. The article analyses the grounds for the acquisition and termination of Russian citizenship, enshrined in the Federal Law “On Citizenship of the Russian Federation” adopted in 2023, as well as in the decrees of the President of the Russian Federation adopted thereafter. The general trend that can be traced in the development of legislation on citizenship — the simplification of the procedure for its acquisition for natives of friendly countries, close to us in language, culture, traditions, along with the tightening of the requirements of legislation in respect of persons who pose a threat to national security and law and order of the Russian Federation — has been revealed.

Impact of different geopolitical factors on the energy transition: The role of geopolitical threats, geopolitical acts, and geopolitical risks

In order to better understand the impact of different geopolitical factors on energy transition, the impact of geopolitical threats (war threats, peace threats, military buildups, nuclear threats and terror threats), geopolitical acts (beginning of war, escalation of war and terror acts), and geopolitical risks on energy transition were systematically investigated. Green technologies, natural resource rents and trade openness were incorporated into the analytical framework, and a dynamic panel threshold model was utilized to explore the impact of geopolitical risks on energy transition across different income levels. To this end, data on geopolitical threats, geopolitical acts, geopolitical risks, energy transitions and other key social economic factors for 38 countries from 2000 to 2022 were collected. The heterogeneity simulation results show that there is a negative correlation between geopolitical threats, geopolitical acts, geopolitical risks and energy transition. Moreover, geopolitical threats have more significant hindrance to the energy transition than geopolitical acts. The results of the nonlinear panel simulation show that there is a double threshold effect of geopolitical risks on energy transition. When geopolitical risk crosses the threshold (0.5197), the coefficient decreases to −0.29, which means that the rising geopolitical risk increases the inhibition on energy transition, and the inhibitory effect is slightly weakened after a certain level. Finally, policy implications are offered.

Geopolitical risks and climate change stocks

This paper aims to examine the impact of geopolitical risk (GPR), threats (GPT) and acts (GPA) on returns and volatilities of regional climate change stocks under different market conditions, employing quantile regressions. Our main results suggest that climate change stock returns positively (negatively) respond to GPR in bullish (bearish) market states, however the effect is not uniform across the regions. The volatilities mainly show a positive response to geopolitical tensions; geopolitical acts appear to have a more pronounced impact on volatilities than geopolitical threats. We further find that GPR leads to higher volatility during the Russia-Ukraine war, creating heightened uncertainty. Overall, the results reveal that geopolitical risks have an asymmetric and heterogenous impact on climate change stocks. The results provide significant insights and implications for financial market participants and policy makers.

ХАРАКТЕРИСТИКИ ІНФРАСТРУКТУРИ ЕЛЕКТРОННОЇ ТОРГІВЛІ: ВИКЛИКИ ТА ПЕРСПЕКТИВИ РОЗВИТКУ

The article highlights the interpretation of the term "electronic commerce" in the context of its institutional and component prismatic perception. Features of the functioning of electronic commerce in the modern global geo-economic climate are outlined. The results of the latest research and publications are analyzed. The influence of the pandemic climate, which treated the fundamental principles of traditional economic activity, was studied. Geopolitical threats caused by Russian aggression against Ukraine are considered. Indicators illustrating the importance of the field of digital entrepreneurship were analyzed. The information of the Forbes Advisor online platform of economic direction was processed, and the global e-commerce market in 2024 was studied. It is proved that the indicators of the mobility and adaptability of the e-commerce phenomenon are such attributive properties as: geographical distribution of the electronic potential of digital commerce, the concentrated advantage of American multinational corporations in the digital commerce market, the integrability of the digital commerce phenomenon. The results of the annual Global Digital Overview report, as of the beginning of 2023, were studied, and it was determined that the indicators of the information gap also characterize the architecture of the Ukrainian online market. The problem of information inequality, which arose in the context of the world's struggle with the devastating consequences of the COVID-19 pandemic, is considered. The fundamental differences of the modern form of digital commerce from the structure of traditional trade are analyzed. The specified nature of electronic commerce demonstrates the integrativeness, interconnectedness, and sensitive adaptability to the relevant mainstreams of the modern geo-economic climate inherited from globalization. Current trends in e-commerce architecture are illustrated, namely the leading actors of the global digital market – both state players and transnational corporations. A trend-based argumentation for trading efficiency of a new type of productivity is described, which can be illustrated by a triad of levels. The key components of the overall potential of modern e-commerce are highlighted - "social" and "mobile" trade. Significant threats and prospects for the development of the phenomenon of "electronic commerce" are highlighted.

Економічна стійкість як базовий концепт у сфері національної безпеки

The article is devoted to the disclosure of the theoretical foundations of the study of economic resilience in relation to national security. Increased attention to the conception of national resilience and the economic basis for its provision is due to the expansion of the range of new threats due to the growth of global interdependence, uncertainty and geopolitical tensions in international relations. The results of the analysis of scientific publications showed that with the unconditional recognition of the importance of ensuring economic resilience in the scientific community, there is an ambivalence of views regarding its essence and place in the structure of national economic security. It is determined that despite the complexity and versatility of the concept of resilience, in the general case, the related conception can be characterized as the ability of a system to constantly develop and adapt to turbulence, while maintaining its main function and structure. The disclosure of the chronology of the development of the conception of resilience confirms the actualization of approaches to ensuring national security under the influence of new geopolitical threats and the key role of resilience in national security strategies. The analysis of the conception of resilience in the interpretation of NATO and the EU allows us to conclude that its understanding correlates with the mission, principles and values of international organizations. It is substantiated that, despite the discursive nature and contrasts in interpretation, economic resilience is a key component of the national security strategy. The fundamental differences between security and resilience are defined as interrelated, but different conceptions, which lie in the nature of measures to ensure them. It is noted that ensuring economic security as a complex of measures to prevent the materialization or escalation of threats is proactive and preventive. In turn, economic resilience is associated with the ability to adapt to threats and minimize their negative impact if they materialize, i.e. involves the implementation of both proactive and reactive actions. It is stated that further studies of economic resilience as a basic conception in the sphere of national security require identification of indicators of its assessment and prerequisites for ensuring in the format of systems of collective security and defense.

Рене Жирар, нигилизм постправды и эскалация насильственной неразличимости

Today’s cluster of geopolitical threats are helpfully addressed by the mimetic theory of René Girard. He accounts for human order and stability in light of cathartic violence preserved in socio-religious form, enabling the peaceful management of desire and the restraint of violent disorder. The challenge to this mechanism represented by Judeo-Christian revelation offers a nonviolent alternative vision but also brings the threat of instability, which has returned in modern times — an insight that Girard identifies in Friedrich Nietzsche, Fyodor Dostoyevsky, and Carl von Clausewitz. In phenomena such as fake news and political populism, the culture wars in which Western self-aggrandisement is matched by its cultural self-laceration, the climate crisis, and the potential escalation to extremes of modern military conflict, the pathologies of mimetic desire threaten humanity with apocalyptic consequences.

Analysis of world military expenditures on production and armaments in the context of modern geopolitical threats

Geopolitical threats and military conflicts in the first quarter of the 21st century have led to changes in the structure of countries' expenditures, with an increase in defense spending on production and armaments, as well as financial support for humanitarian, economic and military needs of the warring countries. The main reason for the increase in military spending in the world is the russian-Ukrainian war, the Israeli-Palestinian conflict, and other geopolitical risks in the Middle East and Taiwan. The growth of these risks encourages countries to increase defense spending, which further complicates the issue of financing socially important and public initiatives. It has been established that global military spending tends to increase during 2015–2023. Last year's military expenditures amounted to up to $2,240 billion, and this figure is the highest of the analyzed periods. Among the world's regions, such as North America, East Asia, Oceania, South Asia, and Europe, there is an increase in defense spending. The only region where military spending fell in 2022 was Africa, due to natural disasters and catastrophes within the region. The share of country expenditures in the structure of global defense spending has increased in countries such as the United States, China, russia, Saudi Arabia, and India. The United Kingdom, France and Japan are maneuvering in almost the same amount of spending during 2015–2023. There is also a trend in the countries of the former Eastern Bloc states, which have been increasing their spending since 2014, after the occupation of Crimea. Military and humanitarian support for Ukraine from Western partners remains a key necessity for deterring the russian aggressor, but the plan for the supply of equipment and weapons does not cover all possible needs of Ukraine, which leads to the search for other ways to maintain the country's military defense capability.

DEVELOPMENT OF UKRAINE’S ADMINISTRATIVE AND TERRITORIAL SYSTEM IS A RESPONSE TO MILITARY CHALLENGES

The problems associated with incompetent land and resource management, inefficient administrative and land taxation systems are especially acute in the face of geopolitical threats and military challenges. The shadow land economy, concealed use of almost half of the shares, socially unfair re-distribution of land resources, and ability to buy hundreds of houses and grounds by one person, and land tax evasion are undermining the communities’ budgets as well as the foundations of social and economic development in rural areas. The paper highlights the need to improve and further develop the administrative and territorial system in Ukraine under the conditions of military challenges. It also presents a journey into the history of administrative and territorial reforms implemented on Ukrainian lands and gives an analysis of similar experience in other countries. The administrative and territorial reforms in European countries managed to combat separatist tendencies. In Europe, the gentrification and urbanization processes preserve the settlement system and sustain the settlement network. However, in Ukraine, even during the war, city authorises continue to support multi-storey residential development projects for city centres, thus undermining the ability of the cities to respond to military threats. The study reveals shortcomings of the current administrative and territorial system and identifies negative patterns in the land taxation system and those associated with socially just re-distribution of land resources. It also proposes a new regional regulation system for Ukraine and presents managerial and regulatory strategies to rationalize main territorial units, namely communities and areas. The ways to increase the sustainability of territories economically, socially, demographically and militarily, are also described. The administrative and territorial reform can only be successful in a socially and economically just society regarding the issues of land recourse re-distribution, taxation system, and infrastructure development.

Exploring the influence of the geopolitical risks on the natural resource price volatility and correlation: Evidence from DCC-MIDAS-X model

This paper uses the expanded dynamic conditional correlation mixed data sampling (DCC-MIDAS-X) model to examine the impact of low-frequency geopolitical risks (GPR) on high-frequency volatility and the correlation of natural resource prices. The empirical results show that GPR and its sub-indices can significantly affect the volatility and correlation of natural resources. The increase in Geopolitical Threats (GPRT) significantly affects the long-run volatility of European Union Allowance (EUA) and Brent crude oil prices. Geopolitical Acts (GPRA) mainly affect the long-run volatility of natural gas prices. In addition, the long-run correlation coefficient, long-run correlation coefficient indicates a competitive relationship between natural resources. Finally, increased GPR and GPRT can significantly reduce the long-run correlation between natural resources. Based on its conclusions, this research makes policy suggestions for businesses and the government. Investors should effectively identify different types of geopolitical risks and their influences to reduce losses and optimize investments. Governments could adjust their policies appropriately to avoid economic shocks due to natural resource volatility caused by geopolitical risks and ensure a stable supply of natural resources.

Do geopolitical risks always harm energy security? Their non-linear effects and mechanism

Exploring the link between geopolitical risk (GPR) and energy security (ES) is essential for ensuring national security and sustainable economic development in the face of frequent global geopolitical conflicts and escalating geopolitical threats. Based on the newly developed GPR index, this research uses unbalanced panel data for 35 nations from 2005 to 2018 to examine the influence of GPR on ES and its impact mechanism. The results show that GPR causes the U-shape effect on ES that first decreases (GPR < 0.59) and then increases (GPR > 0.59), meaning that GPR causes both negative and positive effects on ES, and the results remain robust after a series of tests. Transmission mechanism analysis indicates that renewable energy technology innovation is the key transmission mechanism for the U-shape impact of GPR on ES. Moderating effect analysis shows that international trade reinforces the U-shape effect of GPR on ES, meaning that it reinforces both the negative and positive effects of GPR on ES, while FDI only reinforces the positive effect of GPR on ES. Heterogeneity analysis presents that the U-shape effect of GPR on ES is more significant in OECD countries and net energy-importing countries.

Dynamic Common Correlated Effects of Geopolitical Risk on International Tourism Arrivals

Abstract Research background Geopolitical risk is currently recognized as a worldwide concern that significantly affects various economic sectors. As a consequence, rising geopolitical risks can cause a decline in the number of tourist arrivals. Purpose The aim of this paper is to examine the applicability of a commonly used dynamic model, the autoregressive distributed lag model (ARDL), in a panel data context and the effect of geopolitical risk on explaining tourist demand in chosen countries across long and short time periods. Research methodology On 18 developing economies, the Cross-sectionally Augmented Distributed Lag (CS-ARDL) technique is used. Results The results of the test show interesting insights. Although the consequences of geopolitical threats in the short term are significant and have a negative impact on tourist arrivals, in the long term, results show there is no effect. Specifically, a rise in geopolitical risk decreases foreign visitor visits in the short term but has no lasting impact. Novelty Using an econometric model, this study contributes to the limited research on the link between geopolitical risk and tourist arrivals.

The responsiveness of renewable energy production to geopolitical risks, oil market instability and economic policy uncertainty: Evidence from United States

This paper aims to investigate the responsiveness of renewable energy production (REP) to fluctuations in geopolitical risks, oil prices and economic policy uncertainty (EPU). It applies a cross-quantilogram framework to examine monthly data of the US economy for the period of 1986–2022. The findings illustrate the asymmetric effect of historical geopolitical risk (GPRH) on REP under long memory. The findings also hold after different subcategories of GPRH, including geopolitical threats and geopolitical acts, are considered. A positive shock in GPRH has the most decisive positive impact on REP when the policies are driven by both energy security and environmental commitments. A positive shock in GPRH can negatively impact REP when policies are driven by energy security causes only. EPU exerts strong negative effects on REP in bearish and bullish states of the market under medium and long memory across different measures of EPU. Dynamic connectedness analysis applying TVP-VAR method between pairwise variables indicates that net REP is a volatility receiver to the changes in GPRH, its subcomponents, oil prices and different measures of EPU.

Impact of geopolitical risk on tourism demand: evidence from asymmetric NARDL approach

PurposeMany tourism academics have investigated the linkages between tourism, power and space; few have specifically addressed the profound links between tourism and geopolitics. In view of the restrictive assumptions of the linear framework used in the earlier studies, and hidden asymmetries present in the time series data. Against this backdrop, the study tries to find out how tourists may respond differently to favourable and unfavourable shocks in geopolitical risk (GPR).Design/methodology/approachIn order to capture this asymmetric nature of the problem, the study employs the non-linear autoregressive distributed lag (NARDL) model to evaluate data from 2001Q1 to 2019Q4.FindingsThe results show that both positive and negative shock to GPR does not produce results of equal magnitude. A positive shock to GPR has a more detrimental effect on foreign tourist arrivals (FTA) than a beneficial effect a negative shock produces. Besides this, the present study also looks at the effect of other macro-economic variables on FTA. An ascend in the real effective exchange rate (REER) i.e. appreciation of the domestic currency has an unfavourable impact on foreign visitor arrivals, while an increase in world gross domestic product amplify it. The results of the study are robust to alternative measures of the control variable.Practical implicationsThe study is significant for policymakers in understanding the short and long-run implications of GPR on FTA in India. The present study can assist policymakers, and destination managers to manage the external and internal risks and minimise the consequences of geopolitical threats on the Indian tourism industry. Consequently, destination managers can utilise the study's findings in calibrating their operations and designing crisis marketing strategies within the geopolitical dynamics of the Indian state.Originality/valueThe study tries to find out how tourists may exhibit distinct reactions to positive and negative disturbances in GPR. The study provides first-hand evidence of how GPR impacts tourism demand. The paper also includes the existing body of literature related to GPR factors and their effect on tourist influx, specifically in the framework of the Indian tourism sector.

On the Role of the Judiciary in Ensuring the Information Security of the Russian Federation in the Face of Modern Challenges and Threats

The article substantiates that under the influence of modern geopolitical challenges, the importance of information security as one of the key areas of ensuring the national security of the Russian Federation is increasing. The purpose of the study is to theoretically substantiate the role of judicial authorities in the formation of the information security system of the Russian state in the conditions of modern geopolitical threats and technological challenges. The need to achieve the stated goal led to the formulation and solution of the following scientific tasks: the study of the legal nature of information security and its place in the structure of national security; analysis of current geopolitical and technological challenges and threats to the national security of the country in the information sphere; determining the role of judicial authorities in the information security system, including in the digital environment. Within the framework of this study, a set of methods of scientific cognition was applied, including philosophical, general scientific and private law (formal-legal, comparative-legal, interpretation), which made it possible to achieve the goal and implement the tasks set. According to the results of the study, it is proved that ensuring information security in the context of the activities of judicial authorities should be considered in two dimensions: ensuring information security within the judicial system itself; the activity of judicial bodies in the administration of justice aimed at the adoption of individual law enforcement acts, together with legal acts that create the most comprehensive legal regulation of legal relations in the field of ensuring national information security. The conclusion is made about the special contribution of the judicial authorities in ensuring the national interests of the Russia in the information sphere.

Cybersecurity of Critical Infrastructure Facilities

Relevance. The cybersecurity of information systems and services is becoming one of the important criteria for the quality of services and production of goods in modern society, just like the stability and speed of data transfer. Developers of software products and applications are concerned about the increase in the number of attacks on their systems, the increase in the theft of information and assets. The confrontation between Russia and NATO countries has intensified the growth of geopolitical threats and hacker intrusions into the information system of Russia with the aim of destabilizing and deactivating it. At the same time, Rostelecom-Solar noted that hackers are especially attracted to the critical infrastructure of the Russian economy. The purpose of the study was to evaluate modern technologies for protecting digital services used by companies and to identify new approaches to strengthening security systems. Objectives. The following tasks were set and consistently solved in the article: to assess the current trends in the transformation of information systems, as well as objects of critical information infrastructure in the light of the increasing attacks of hackers; propose a new approach to solving cybersecurity problems. Methodology. The methods of graphical, horizontal and logical analysis, generalization and systematization of data were used in the work. Results. Based on a general review of technologies for protecting critical infrastructure, both from the side of the state and from the side of business, it was concluded that it is necessary to form a triad of visibility of vulnerabilities. Conclusions. The article considers the directions of restructuring the entire cyber industry and the formation of a new vector for the development of the digital world in the context of changing geopolitical confrontations between developed powers. It is concluded that it is necessary to change the paradigm of the technology market in the direction of transferring all programs to Russian technologies and intensifying their promotion to the EAEU countries, which will allow building a new Eurasian IT market under the guidance of the Russian Federation.

Does the causality between environmental sustainability, non-renewable energy consumption, geopolitical risks, and trade liberalization matter for Pakistan? Evidence from VECM analysis

Geopolitical threats have increased dramatically globally in recent years, adversely affecting the environment tremendously. On the other hand, there is a growing gap between the use of non-renewable energy, trade liberalization, and environmental sustainability. Due to this, the current work simulates the links between geopolitical threats, non-renewable energy use, trade liberalization, and environmental sustainability using a vector error correction model (VECM) and Granger causality test. The analysis includes data spanning from 1980 to 2021. Research outcomes indicated that geopolitical risks (GPR), Non-renewable energy consumption (NRE), Natural Resource (NR) and industrialization (IND) have a negative and statistically significant influence i.e., 0.234, 0.052, 0.028, and 0.070 units respectively on environmental sustainability (ES) while natural resource (NR) have also negative but insignificant impact on environmental sustainability. Alongside, trade liberalization (TR) and urbanization (UB) posed a positive and statistically significant influence i.e., 0.040 and 0.437 units respectively on ES. Further, causality analysis validates the feedback effect among GPR, NRE, TR, and ES. GPR, NRE, and TR granger cause environmental sustainability. The government can prepare for potential environmental disasters such as floods, droughts, and earthquakes by investing in early warning systems, emergency response teams, and disaster relief supplies. This can help mitigate the impact of geopolitical risks that can result in natural disasters. Pakistan should prioritize investing large resources in diplomatic endeavours to improve regional dynamics and ties with neighboring nations. Pakistan should place a high emphasis on developing methods targeted at reducing its non-renewable energy use to mitigate the negative effects. This might entail offering financial incentives, implementing efficient feed-in tariff schemes, and developing a thorough strategy for boosting the capacity of renewable energy sources.

Geopolitical risk and stock price crash risk: The mitigating role of ESG performance

We study the effect of geopolitical risk (GPR) on stock price crash risk and we investigate the mediating role of the ESG factors in this relationship. Using a large international sample of publicly listed firms, we find that higher GPR causes stock price crashes to occur more frequently. This result holds to several robustness checks and to the use of different measures of stock price crash risk and we rule out any potential endogeneity concern using an Instrumental Variables (IV) approach. We also find that the causal effect of GPR on crash events is mainly driven by the expectations and threats of geopolitical tensions (geopolitical threats), rather than their effective realization and escalation (geopolitical acts). However, when exploring the potential mitigating role of ESG factors, we observe these negative implications to be less severe for high ESG-rated issuers and, specifically, for firms scoring high in the Environmental and Social dimensions. Our study demonstrates that firms more engaged in ESG practices are more resilient to the GPR's adverse effect on stock price crash risk.

Ensuring the economic security of the country in the new geopolitical realities

The issue of ensuring Russia’s economic security is an important and priority task, especially in the tightening conditions of the consolidated sanctions policy of the European Union countries and the United States. The process of developing measures that allow Russian economy to develop sustainably and effectively counter the growing geopolitical threats is complex and requires a comprehensive and honest assessment, including the import dependence degree of business, the degree and level of involvement in global supply chains, the development level of domestic production, etc. For each assessment area, indicators should be identified that have a preventive nature and make it possible to detect a growing potential threat. In the research theoretical provisions on economic security are considered; existing threats to economic security in geopolitical realities are formulated; indicators presented by the Federal State Statistics Service are identified that allow assessing the threat degree; directions for ensuring economic security are developed.