Being an emerging economy : to what extent do geopolitical risks hamper technology and FDI inflows?
Nguyen, Trang Thi Thuy (Van Lang University)
Pham, Thai Binh (University of Economics Ho Chi Minch City)
Sala Lorda, Hector (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada)

Date:	2022
Abstract:	This paper evaluates the impact of geopolitical risk (GPR) on total factor productivity (TFP) and the inflows of foreign direct investment (FDI) for a group of 18 emerging economies between 1985 and 2019. Based on Granger causality panel data tests, we show that the trajectories of these variables cannot be neglected to explain one another. To account for cross-equation influence, we estimate seemingly unrelated regression (SUR) models and uncover a significant and robust negative impact of GPR on TFP and FDI. Counterfactual simulations provide a quantitative approximation of GPR's impact in 2015-2019, which is substantial in terms of TFP growth but small in terms of FDI. For the emerging economies to consolidate their economic progress, geopolitical stability is essential.
Grants:	Agencia Estatal de Investigación PID2019-104723RB-I00
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades.
Language:	Anglès
Document:	Article ; recerca ; Versió sotmesa a revisió
Subject:	Geopolitical risk ; TFP ; FDI ; Emerging economies ; SDG 10 - Reduced Inequalities
Published in:	Economic Analysis and Policy, Vol. 74 (2022) , p. 728-746, ISSN 2204-2296

DOI: 10.1016/j.eap.2022.04.005

Preprint 31 p, 546.0 KB

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