Geopolitical analysis of Southeast Asian countries due to the Russian invasion of Ukraine / Wijaya ... [et al.]

Prior studies have argued that there is a significant relationship between geopolitical risks and stock market volatility. Geopolitical risk is the threat posed to international stability on the socioeconomics by events, i.e., war tension, rampant of terrorism, natural disasters and bilateral and multi-lateral diplomatic vulnerabilities. It is believed that any ecopolitical risk issues directly or indirectly impact the economic and financial environment. This study examined the relationship between geopolitical risk (GPR) and the dynamic effect of the stock market (SM) in four Southeast Asian countries, Indonesia, Malaysia, the Philippines and Thailand. The study sample covered annual frequency data from January 2000 to March 2022. This study deployed Ordinary Least Square (OLS) econometric approaches to examine the focused variables. The estimations found that GPR was negative and significant on the stock market in Indonesia and Thailand. It means that the highest the GPR in Indonesia and Thailand, the lower the investor investing in the stock market. On the other hand, GPR has minimal impacts on the stock markets of Malaysia and the Philippines. The findings of this study might be helpful for investors aiming to maximise their premium from the stock markets of the countries.