Causal Relationship Between the Spread of the COVID-19 and Geopolitical Risks in Emerging Economies

Front Public Health. 2020 Dec 17:8:626055. doi: 10.3389/fpubh.2020.626055. eCollection 2020.

Abstract

This study investigates the causality between the spread of the COVID-19 pandemic (measured by new cases per million and new deaths per million) and geopolitical risks (measured by the index of geopolitical risks). We use the balanced panel data framework in 18 emerging economies from January 2020 to August 2020. We run the initial tests of cross-sectional dependence and the panel unit root tests with capturing cross-sectional dependence. Then, we utilize the panel Granger non-causality tests for heterogeneous stationary panel datasets. According to the findings, there is a significant causality from both measures of spreading the COVID-19 pandemic to geopolitical risks. Further tests are performed, and potential implications are also discussed.

Keywords: COVID-19 pandemic; emerging economies; geopolitical risks; measuring the spread of the COVID-19; panel granger non-causality tests.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • COVID-19 / economics*
  • COVID-19 / epidemiology*
  • Cross-Sectional Studies
  • Disease Outbreaks / economics*
  • Disease Outbreaks / statistics & numerical data
  • Economic Development / statistics & numerical data*
  • Humans
  • Models, Theoretical
  • Pandemics / economics*
  • Pandemics / statistics & numerical data*
  • Politics*
  • Risk Factors
  • SARS-CoV-2