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How do systematic risk spillovers reshape investment outcomes?

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  • Tao, Miaomiao
  • Roubaud, David
  • Tiwari, Aviral Kumar
  • Silva, Emilson

Abstract

We investigate the effects of domestic and cross-border systematic risk spillovers on corporate investment metrics, using stock indices comprising 212 energy firms across 36 countries, spanning July 1, 2009, to August 31, 2023, sourced from S&P Global Commodity Insights®. The two-layered network underscores the catastrophic consequences induced by the Russia–Ukraine conflict in Europe. Our regression results designate that systematic risk spillovers composed of domestic and cross-border risks hinder corporate real investments while encouraging new investments and diminishing inefficiencies. Yet geopolitical risk amplifies these risks, leading to broader disruptions in investment behaviors.

Suggested Citation

  • Tao, Miaomiao & Roubaud, David & Tiwari, Aviral Kumar & Silva, Emilson, 2025. "How do systematic risk spillovers reshape investment outcomes?," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325000741
    DOI: 10.1016/j.frl.2025.106809
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