Determinants of Geopolitical Risk spillovers: New Evidence from Developing Economies.

Determinants of Geopolitical Risk spillovers: New Evidence from Developing Economies. | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Determinants of Geopolitical Risk spillovers: New Evidence from Developing Economies. Isaac Anamsakya Atanga, Hector Rufrancos, Seda Erdem, Andrews Adugdaa Akola, and 1 more This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7164791/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study investigates the cross-country transmission of geopolitical risk (GPR) in Sub-Saharan Africa using locally constructed GPR indices from Eight economies. Our study introduces two key innovations. First, we develop the first set of locally sourced GPR indices for eight African economies, based on domestic news content, to accurately capture country-specific geopolitical dynamics often overlooked by global indices. Second, we apply both time-domain and frequency-domain spillover models to measure and characterize the cross-country GPR transmission and the determinants. The results reveal significant geopolitical interdependence in the region, with South Africa, Egypt, and Nigeria identified as major net exporters of GPR. Moreover, we find evidence of distinct regional clusters, with core economies exhibiting stronger transmission patterns than their West African counterparts. To investigate the underlying mechanisms driving geopolitical risk (GPR) spillovers, we estimate a cross-sectional regression based on a gravity model framework. The results reveal that bilateral trade intensity, geographic proximity, and macroeconomic fundamentals significantly shape the scale and direction of spillovers. Higher import flows from the origin to the recipient country are associated with reduced GPR transmission, while shared borders and a common language also attenuate spillover effects, suggesting regional familiarity may serve as a buffer. Conversely, higher foreign reserves in recipient countries are linked to greater sensitivity to external GPR shocks, potentially due to increased exposure or signaling effects. These findings provide a valuable basis for monitoring and managing transnational GPR transmission, particularly in the context of the African Continental Free Trade Area (AfCFTA). The study also provides important implications for policy markers to enhance institutional resilience, regional security cooperation, and adaptive governance mechanisms to support the AfCFTA’s goals of economic integration, trade facilitation, and harmonization. Geopolitical Risk Spillovers Connectedness Business synchronization Trade linkages Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7164791","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":495645362,"identity":"a28c5039-dca4-4060-be99-cb980ba723a1","order_by":0,"name":"Isaac Anamsakya Atanga","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAuUlEQVRIiWNgGAWjYBACNgYGxgcfGBh4oPwEorQwG85gMCBBC0iXNA+DAYxDhBY+9sMPpG3+/JExb2B++IGxLY0IK3jSDIxz2wx4ZA6wGUswtuUQoYUhwSA5t8GAR4KBwYyBsa2CCC38zz8ctvgD0sL+jUgtEjmGzQxsIC08IFuIcZjEm2LG3jZjHglmnmKJhHNEeF++P337jx9/5Owl2Ns3fvhQlkxYCwIwMxAbkaNgFIyCUTAKCAIAu0ArQXb4h7wAAAAASUVORK5CYII=","orcid":"","institution":"University of Stirling","correspondingAuthor":true,"prefix":"","firstName":"Isaac","middleName":"Anamsakya","lastName":"Atanga","suffix":""},{"id":495645364,"identity":"a348951b-e39f-4da1-9f6d-e321473bc914","order_by":1,"name":"Hector Rufrancos","email":"","orcid":"","institution":"University of Stirling","correspondingAuthor":false,"prefix":"","firstName":"Hector","middleName":"","lastName":"Rufrancos","suffix":""},{"id":495645366,"identity":"331a1949-fbe9-4832-8e1e-75111006c932","order_by":2,"name":"Seda Erdem","email":"","orcid":"","institution":"University of Stirling","correspondingAuthor":false,"prefix":"","firstName":"Seda","middleName":"","lastName":"Erdem","suffix":""},{"id":495645368,"identity":"edc5977b-d0b6-42b7-a950-b024ce189418","order_by":3,"name":"Andrews Adugdaa Akola","email":"","orcid":"","institution":"University of Professional Studies","correspondingAuthor":false,"prefix":"","firstName":"Andrews","middleName":"Adugdaa","lastName":"Akola","suffix":""},{"id":495645370,"identity":"1b092ed7-60b3-4872-b479-15f501b3dd02","order_by":4,"name":"Ishmael Ackah","email":"","orcid":"","institution":"Energy for Growth Hub","correspondingAuthor":false,"prefix":"","firstName":"Ishmael","middleName":"","lastName":"Ackah","suffix":""}],"badges":[],"createdAt":"2025-07-19 13:38:26","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-7164791/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-7164791/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":90227508,"identity":"e65208d8-b454-4190-84a0-7d4faaa02312","added_by":"auto","created_at":"2025-08-30 12:16:43","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":510338,"visible":true,"origin":"","legend":"","description":"","filename":"DeterminantsofGeopolticalRiskspilloverNewEvidencefromDevelopingEconomies9.pdf","url":"https://assets-eu.researchsquare.com/files/rs-7164791/v1_covered_7e795afc-f0bf-4b48-9f4a-0ed86001416d.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Determinants of Geopolitical Risk spillovers: New Evidence from Developing Economies.","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Geopolitical Risk, Spillovers, Connectedness, Business synchronization, Trade linkages","lastPublishedDoi":"10.21203/rs.3.rs-7164791/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-7164791/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"This study investigates the cross-country transmission of geopolitical risk (GPR) in Sub-Saharan Africa using locally constructed GPR indices from Eight economies. 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