Geopolitical risk and shock transmission: evaluating economic resilience in emerging economies

In the past decade, geopolitical risk has re-emerged as a structural macroeconomic threat, but its transmission to the resilience of developing economies remains underexplored, partly because traditional linear models cannot capture the nonlinear, time-varying and frequency-specific nature of these shocks. This study examined how and over which time horizons geopolitical risk affected four MSCI emerging markets (India, China, Brazil and Türkiye), using monthly data from January 2010 to December 2024 (720 country–month observations). Resilience was captured by a composite economic resilience index and analysed with TVP-VAR Diebold–Yilmaz connectedness, panel quantile regression and wavelet coherence. Türkiye appeared to be the main net absorber of shocks, while India, China and Brazil were comparatively insulated. The effect of geopolitical risk is roughly four times stronger in the fragile lower tail of the resilience distribution than at the upper end, indicating that geopolitical escalation is regressive, widening the gap between strong and weak economies. Co-movement is concentrated at low frequencies, implying that resilience losses operate through slow structural channels rather than transient market panic. Resilience is best strengthened through long-term institutional and structural capacity rather than short-term market stabilisation. The findings are relevant to SDG 8, SDG 16 and SDG 17.