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Dynamic spillover of geopolitical risks on the shipping and commodity markets: Insights from ripple spreading network model

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  • Qiao, Sen
  • Li, Yingchen
  • Zhao, Haibo
  • Chang, Yuan

Abstract

Global economic growth has substantially expanded maritime trade. Shipping has emerged as the principal mode of transportation in the global commodity trade. This study adopts the TVP-VAR-DY framework to analyze the spillover dynamics and characteristics of shipping and commodity markets. Following this analysis, the Ripple Spreading Network Model is applied to investigate the impact of exogenous shocks on the system. The results indicate a significant risk spillover relationship between the shipping and commodity markets. This relationship exhibits substantial asymmetry across different market conditions. In particular, during market downturns, geopolitical risk spreads more rapidly among markets. Bidirectional spillover pathways are established within a shorter time horizon. During major geopolitical shock events, such as the China-US trade conflict, the Russia-Ukraine war, heightened Middle Eastern tensions, and the COVID-19 pandemic, spillover effects of risk either intensify dramatically or remain persistently elevated. These findings indicate that market participants and regulators should proactively prepare for future geopolitical risks. Differentiated response strategies under varying market conditions are essential to mitigate losses arising from geopolitical shock events.

Suggested Citation

  • Qiao, Sen & Li, Yingchen & Zhao, Haibo & Chang, Yuan, 2026. "Dynamic spillover of geopolitical risks on the shipping and commodity markets: Insights from ripple spreading network model," Transport Policy, Elsevier, vol. 185(C).
    • Handle: RePEc:eee:trapol:v:185:y:2026:i:c:s0967070x26002337
    DOI: 10.1016/j.tranpol.2026.104223
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