Analysis reveals the impact of geopolitical tensions on energy stocks, highlighting emerging trends and implications.
The aim of this study is to expand the existing literature by analyzing the time-varying effects of US-China tensions on energy stocks using the TVP-VAR methodology. Unlike the sustained positive responses observed in clean energy, time-varying responses highlight negative impacts on global economic activity and oil and gas stocks during significant geopolitical events, such as the COVID-19 pandemic and trade wars. The findings emphasize the necessity of integrating evolving geopolitical risks into financial market analyses and understanding sector-specific dynamics.
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Caporin et al. (2025) studied this question.
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