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Lookup NU author(s): Dr Vu TrinhORCiD
This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).
This study investigates the relationship between national geopolitical risk (GPR) and firm-level tail risks, including total tail risk, systematic tail risk, and idiosyncratic tail risk, using a comprehensive global dataset comprising 19,823 firms across 14 countries from 1990 to 2019. The sample includes energy-focused economies, where geopolitical tensions often intersect with national energy strategies and global resource dependencies. The findings indicate that geopolitical risk significantly increases total and idiosyncratic tail risks while reducing systematic tail risk, suggesting a redistribution of risk exposure under geopolitical uncertainty. Moreover, subsample analysis reveals that the observed effects are primarily driven by non-energy sector firms and oil-importers. Despite their inherent exposure to geopolitical risks, energy firms exhibit resilience, likely due to advanced risk management practices, government interventions, and the counterbalancing effects of energy price fluctuations. These findings have important implications for policymakers and market participants, aiding in the development of strategies to better manage firm-specific tail risks in response to rising cross-country political instability.
Author(s): Cao ND, Trinh VQ, Nguyen TD
Publication type: Article
Publication status: Published
Journal: Energy Economics
Year: 2025
Volume: 150
Print publication date: 01/10/2025
Online publication date: 15/08/2025
Acceptance date: 12/08/2025
Date deposited: 17/09/2025
ISSN (print): 0140-9883
ISSN (electronic): 1873-6181
Publisher: Elsevier
URL: https://doi.org/10.1016/j.eneco.2025.108844
DOI: 10.1016/j.eneco.2025.108844
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