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The asymmetric effect of geopolitical risk on China's crude oil prices: New evidence from a QARDL approach

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  • Ren, Xiaohang
  • An, Yaning
  • Jin, Chenglu

Abstract

This paper explores the short- and long-term impacts of international geopolitical risk (GPR) on China's crude oil (INE) prices. A Quantile Autoregressive Distributed Lag (QARDL) approach is employed to comprehensively explain the relationship between GPR and different price quantiles of INE prices by considering both nonlinear and asymmetric characteristics. Our results show that after controlling global oil prices, investments in renewable energy, and crude oil inventory, GPR negatively affects INE prices in most cases except the higher quantiles, where it positively affects INE prices in the short-term.

Suggested Citation

  • Ren, Xiaohang & An, Yaning & Jin, Chenglu, 2023. "The asymmetric effect of geopolitical risk on China's crude oil prices: New evidence from a QARDL approach," Finance Research Letters, Elsevier, vol. 53(C).
    • Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000119
    DOI: 10.1016/j.frl.2023.103637
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