IDEAS home Printed from https://ideas.repec.org/a/wly/natres/v49y2025i2p2097-2110.html
   My bibliography  Save this article

Are Geopolitical Risk and Economic Uncertainty Matter for Natural Resources Rents?

Author

Listed:
  • Pelin Öge Güney

Abstract

The aim of this study is to investigate the impact of geopolitical risk and economic policy uncertainty on natural resource rents for selected MENA countries and Turkey, covering the period 1973–2021. The geopolitical risk index was researched by Caldara and Iacoviello and the World Uncertainty Index was taken from Ahir et al. We used linear and nonlinear ARDL techniques. Results from linear ARDL models document that geopolitical risk has a significant positive effect on natural resource rents in Egypt and Turkey, while it has a negative effect on natural resource rents in Saudi Arabia and Tunisia. When we look at the impact of uncertainty on natural resource rents, we see that increasing uncertainty reduces natural resource rents in all countries except Saudi Arabia. Moreover, the findings of nonlinear ARDL models show that negative and positive shocks in the geopolitical risk and uncertainty index affect natural resource rents in both the short and long term. Our results show that geopolitical risk and economic policy uncertainty can be used to improve models of natural resource markets.

Suggested Citation

  • Pelin Öge Güney, 2025. "Are Geopolitical Risk and Economic Uncertainty Matter for Natural Resources Rents?," Natural Resources Forum, Blackwell Publishing, vol. 49(2), pages 2097-2110, May.
  • Handle: RePEc:wly:natres:v:49:y:2025:i:2:p:2097-2110
    DOI: 10.1111/1477-8947.12596
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1477-8947.12596
    Download Restriction: no

    File URL: https://libkey.io/10.1111/1477-8947.12596?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Balcilar, Mehmet & Bonato, Matteo & Demirer, Riza & Gupta, Rangan, 2018. "Geopolitical risks and stock market dynamics of the BRICS," Economic Systems, Elsevier, vol. 42(2), pages 295-306.
    2. Su, Chi-Wei & Khan, Khalid & Tao, Ran & Nicoleta-Claudia, Moldovan, 2019. "Does geopolitical risk strengthen or depress oil prices and financial liquidity? Evidence from Saudi Arabia," Energy, Elsevier, vol. 187(C).
    3. Dogan, Eyup & Majeed, Muhammad Tariq & Luni, Tania, 2021. "Analyzing the impacts of geopolitical risk and economic uncertainty on natural resources rents," Resources Policy, Elsevier, vol. 72(C).
    4. Yang, Lu, 2019. "Connectedness of economic policy uncertainty and oil price shocks in a time domain perspective," Energy Economics, Elsevier, vol. 80(C), pages 219-233.
    5. Chak Hung Jack Cheng & Ching-Wai (Jeremy) Chiu, 2018. "How important are global geopolitical risks to emerging countries?," International Economics, CEPII research center, issue 156, pages 305-325.
    6. Bouoiyour, Jamal & Selmi, Refk & Hammoudeh, Shawkat & Wohar, Mark E., 2019. "What are the categories of geopolitical risks that could drive oil prices higher? Acts or threats?," Energy Economics, Elsevier, vol. 84(C).
    7. Hites Ahir & Nicholas Bloom & Davide Furceri, 2022. "The world uncertainty index," POID Working Papers 031, Centre for Economic Performance, LSE.
    8. Balcilar, Mehmet & Gupta, Rangan & Pierdzioch, Christian, 2016. "Does uncertainty move the gold price? New evidence from a nonparametric causality-in-quantiles test," Resources Policy, Elsevier, vol. 49(C), pages 74-80.
    9. Liu, Jing & Ma, Feng & Tang, Yingkai & Zhang, Yaojie, 2019. "Geopolitical risk and oil volatility: A new insight," Energy Economics, Elsevier, vol. 84(C).
    10. Granger, Clive W.J. & Gawon Yoon, 2002. "Hidden Cointegration," Royal Economic Society Annual Conference 2002 92, Royal Economic Society.
    11. Olanipekun, Ifedolapo Olabisi & Alola, Andrew Adewale, 2020. "Crude oil production in the Persian Gulf amidst geopolitical risk, cost of damage and resources rents: Is there asymmetric inference?," Resources Policy, Elsevier, vol. 69(C).
    12. Muğaloğlu, Erhan & Kuşkaya, Sevda & Aldieri, Luigi & Alnour, Mohammed & Hoque, Mohammad Enamul & Magazzino, Cosimo & Bilgili, Faik, 2023. "Dynamic regime differences in the market behavior of primary natural resources in response to geopolitical risk and economic policy uncertainty," Resources Policy, Elsevier, vol. 87(PB).
    13. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    14. Liu, Guanchun & Zhang, Chengsi, 2020. "Economic policy uncertainty and firms' investment and financing decisions in China," China Economic Review, Elsevier, vol. 63(C).
    15. Lutz Kilian, 2009. "Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market," American Economic Review, American Economic Association, vol. 99(3), pages 1053-1069, June.
    16. Al-Shboul, Mohammad & Maghyereh, Aktham & Hassan, Abul & Molyneux, Phillip, 2020. "Political risk and bank stability in the Middle East and North Africa region," Pacific-Basin Finance Journal, Elsevier, vol. 60(C).
    17. Fen Li & Zhehao Huang & Junhao Zhong & Khaldoon Albitar, 2020. "Do Tense Geopolitical Factors Drive Crude Oil Prices?," Energies, MDPI, vol. 13(16), pages 1-20, August.
    18. Huiqiang Xie & Adnan Khurshid & Abdur Rauf & Khalid Khan & Adrian Cantemir Calin, 2023. "Is Geopolitical Turmoil Driving Petroleum Prices and Financial Liquidity Relationship? Wavelet-Based Evidence from Middle-East," Defence and Peace Economics, Taylor & Francis Journals, vol. 34(6), pages 810-826, August.
    19. repec:cdl:ucsdec:qt9qn5f61j is not listed on IDEAS
    20. Li, Yurog & Cong, Zhenglong & Xie, Yufan & Wang, Yan & Wang, Hongmei, 2022. "The relationship between green finance, economic factors, geopolitical risk and natural resources commodity prices: Evidence from five most natural resources holding countries," Resources Policy, Elsevier, vol. 78(C).
    21. Ine Van Robays, 2016. "Macroeconomic Uncertainty and Oil Price Volatility," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(5), pages 671-693, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kisswani, Khalid M. & Fikru, Mahelet G., 2025. "The dynamic nexus between economic policy uncertainty, geopolitical risk, and natural resource rents of ASEAN-5 countries: Insights from the novel Fourier augmented ARDL method (FAARDL)," Resources Policy, Elsevier, vol. 100(C).
    2. Dogan, Eyup & Majeed, Muhammad Tariq & Luni, Tania, 2021. "Analyzing the impacts of geopolitical risk and economic uncertainty on natural resources rents," Resources Policy, Elsevier, vol. 72(C).
    3. Xiao, Jihong & Wen, Fenghua & He, Zhifang, 2023. "Impact of geopolitical risks on investor attention and speculation in the oil market: Evidence from nonlinear and time-varying analysis," Energy, Elsevier, vol. 267(C).
    4. Zhou, Bingjun & Huang, Yan & Gao, Ke & Luo, Chunyang, 2024. "How geopolitical risk and economic policy uncertainty impact coal, natural gas, and oil rent? Evidence from China," Resources Policy, Elsevier, vol. 88(C).
    5. Zhang, Yulian & Hamori, Shigeyuki, 2022. "A connectedness analysis among BRICS’s geopolitical risks and the US macroeconomy," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 182-203.
    6. Assaf, Ata & Charif, Husni & Mokni, Khaled, 2021. "Dynamic connectedness between uncertainty and energy markets: Do investor sentiments matter?," Resources Policy, Elsevier, vol. 72(C).
    7. Chen, Zhuoyi & Liu, Yuanyuan & Zhang, Hongwei, 2024. "Can geopolitical risks impact the long-run correlation between crude oil and clean energy markets? Evidence from a regime-switching analysis," Renewable Energy, Elsevier, vol. 229(C).
    8. Ahmet Faruk Aysan & Ali Yavuz Polat & Hasan Tekin & Ahmet Semih Tunalı, 2023. "The Ascent of Geopolitics: Scientometric Analysis and Ramifications of Geopolitical Risk," Defence and Peace Economics, Taylor & Francis Journals, vol. 34(6), pages 791-809, August.
    9. Gong, Xu & Xu, Jun, 2022. "Geopolitical risk and dynamic connectedness between commodity markets," Energy Economics, Elsevier, vol. 110(C).
    10. Lee, Chi-Chuan & Lee, Chien-Chiang & Li, Yong-Yi, 2021. "Oil price shocks, geopolitical risks, and green bond market dynamics," The North American Journal of Economics and Finance, Elsevier, vol. 55(C).
    11. Sweidan, Osama D. & Elbargathi, Khadiga, 2022. "The effect of oil rent on economic development in Saudi Arabia: Comparing the role of globalization and the international geopolitical risk," Resources Policy, Elsevier, vol. 75(C).
    12. Mo, Bin & Nie, He & Zhao, Rongjie, 2024. "Dynamic nonlinear effects of geopolitical risks on commodities: Fresh evidence from quantile methods," Energy, Elsevier, vol. 288(C).
    13. Sohag, Kazi & Hammoudeh, Shawkat & Elsayed, Ahmed H. & Mariev, Oleg & Safonova, Yulia, 2022. "Do geopolitical events transmit opportunity or threat to green markets? Decomposed measures of geopolitical risks," Energy Economics, Elsevier, vol. 111(C).
    14. Rangan Gupta & Sayar Karmakar & Christian Pierdzioch, 2024. "Safe Havens, Machine Learning, and the Sources of Geopolitical Risk: A Forecasting Analysis Using Over a Century of Data," Computational Economics, Springer;Society for Computational Economics, vol. 64(1), pages 487-513, July.
    15. Choi, Sun-Yong, 2022. "Evidence from a multiple and partial wavelet analysis on the impact of geopolitical concerns on stock markets in North-East Asian countries," Finance Research Letters, Elsevier, vol. 46(PB).
    16. Long, Shaobo & Guo, Jiaqi, 2022. "Infectious disease equity market volatility, geopolitical risk, speculation, and commodity returns: Comparative analysis of five epidemic outbreaks," Research in International Business and Finance, Elsevier, vol. 62(C).
    17. Zhang, Zhikai & Wang, Yudong & Xiao, Jihong & Zhang, Yaojie, 2023. "Not all geopolitical shocks are alike: Identifying price dynamics in the crude oil market under tensions," Resources Policy, Elsevier, vol. 80(C).
    18. António Afonso & José Alves & João Jalles & Sofia Monteiro & João Tovar Jalles, 2024. "Energy Price Dynamics in the Face of Uncertainty Shocks and the Role of Exchange Rate Regimes: A Global Cross-Country Analysis," CESifo Working Paper Series 11384, CESifo.
    19. Syed, Qasim Raza & Durani, Farah & Kisswani, Khalid M. & Alola, Andrew Adewale & Siddiqui, Aaliyah & Anwar, Ahsan, 2024. "Testing natural resource curse hypothesis amidst geopolitical risk: Global evidence using novel Fourier augmented ARDL approach," Resources Policy, Elsevier, vol. 88(C).
    20. Pan, Lijun & Wang, Yangjie & Sun, Xiaofei & Sadiq, Muhammad & Dagestani, Abd Alwahed, 2023. "Natural resources: A determining factor of geopolitical risk in Russia? Revisiting conflict-based perspective," Resources Policy, Elsevier, vol. 85(PA).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:natres:v:49:y:2025:i:2:p:2097-2110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1477-8947 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.