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Understanding energy security in geopolitical contexts: Insights from decomposing energy diversification indexes

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  • Dao, Thuy
  • Awijen, Haithem
  • Ahmed, Rizwan
  • Ameur, Hachmi Ben

Abstract

This study examines the influence of technological innovation and geopolitical risk on energy security by analyzing energy diversification indices—the Adjusted Herfindahl–Hirschman Index (HHI) and Country Diversification Index (CDI)—across 117 nations from 2002 to 2021. Utilizing Pooled OLS, Feasible Generalized Least Squares (FGLS), and Multilevel Regression models, we evaluate the impact of patent-driven innovation and geopolitical volatility on energy diversification, political risk, and covariance effects. Our study concentrates on significant geopolitical events, such as the Iraq War, the Annexation of Crimea, and the 2014 Oil Price Collapse. Findings indicate that technological innovation consistently improves diversification and covariance dimensions, however, its impact on risk is contingent upon specific events. Conversely, geopolitical risk exhibits inconsistent statistical significance, indicating a more intricate, indirect influence on energy security outcomes. These findings provide practical recommendations for policymakers aiming to integrate an innovation-focused energy strategy with resilience to geopolitical disruptions.

Suggested Citation

  • Dao, Thuy & Awijen, Haithem & Ahmed, Rizwan & Ameur, Hachmi Ben, 2025. "Understanding energy security in geopolitical contexts: Insights from decomposing energy diversification indexes," Energy Economics, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:eneeco:v:152:y:2025:i:c:s0140988325007741
    DOI: 10.1016/j.eneco.2025.108947
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    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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