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Financial shock transmission in the space economy

Author

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  • Khan, Ifran
  • Faryal, Mrs
  • Chui, Chin Man
  • Yao, Qinuo

Abstract

This study employs the novel DCC-GARCH-R² framework to examine time-varying volatility spillovers across the financial ecosystem of the space economy. The analysis encompasses six key assets: three ETFs (thematic space: UFO, ROKT; broad technology: XLK) and three individual equities (ASTS, SPCE, LMT), spanning November 2019 to January 2026. We find moderate systemic integration (TCI=45.68%), revealing a tiered network: the hybrid ETF ROKT is the dominant net transmitter of volatility, while the legacy firm LMT is the primary net receiver. The sector demonstrates acute crisis sensitivity, with connectedness intensifying sharply during the pandemic, war, and policy shifts. These findings highlight thematic ETFs as pivotal volatility conduits, yielding critical implications for frontier market risk management.

Suggested Citation

  • Khan, Ifran & Faryal, Mrs & Chui, Chin Man & Yao, Qinuo, 2026. "Financial shock transmission in the space economy," Finance Research Letters, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:finlet:v:101:y:2026:i:c:s154461232600574x
    DOI: 10.1016/j.frl.2026.110045
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