IRO Journals
Recent Research Reviews Journal

A Review of Geopolitical Conflicts and Stock Market Performance

Open Access
Published: 17 July, 2026
Pages: 216-229
  • Pradeep N. Hathi Pradeep N. Hathi
    Vivek College of Commerce, University of Mumbai, Goregaon West, Mumbai, India
    Vivek College of Commerce, University of Mumbai, Goregaon West, Mumbai, India
view PDF
view PDF

How to Cite

Hathi, Pradeep N. 2026. “A Review of Geopolitical Conflicts and Stock Market Performance”. Recent Research Reviews Journal 5 (1): 216-29. https://doi.org/10.36548/rrrj.2026.1.014.
ACM ACS APA ABNT Chicago Harvard IEEE MLA Turabian Vancouver AMA

Download Citation

Endnote/Zotero/Mendeley (RIS) BibTeX

Keywords

Geopolitical Risk
Stock Market Volatility
Financial Markets
Investor Behavior
Spillover Effects
Risk Transmission
Macro-Financial Risk

Abstract

Geopolitical risk has become one of the important factors contributing to uncertainties in global financial markets by influencing investments, market stability, and economic growth. This research study provides an overview of the effect of geopolitics on stock market performance, stock market volatility, investor behavior and financial system resilience. Conceptual models are used to describe the impact of geopolitical risk and macro-financial propagation mechanisms. The presented analysis explores the methodologies used in analyzing the influence of geopolitics ranging from traditional econometric models to advanced GARCH, TVP-VAR, network and quantile models and provides a comparative analysis of different regions' vulnerability to geopolitics, sector responses to geopolitical risk, and risk propagation. At the same time, research gaps in integrating macro-financial perspective, behavioral economics, and sector approach in studies of the effects of geopolitical risk on stock market dynamics are also presented. This study highlights the effect of geopolitics on risk management practices and investment decisions to ensure a better financial interconnectedness.

References

  1. Hasyim, Fuad, Moh Nurul Qomar, and Husny Gibreel Musa Saleh. "Resilience of Islamic and Conventional Stocks to Geopolitical Conflict: A GARCH Model Analysis." Asian Journal of Islamic Management (AJIM) 2024, vol. 6, no. 2, 122-139.
  2. Sayed, Omer Ahmed. "The Impact of The Russia-Ukraine Conflict on the Saudi Arabian Stock Market: An Event Study Analysis." International Journal of Applied Economics, finance and accounting 2024, vol. 18, no. 2, 386-400.
  3. Nasouri, Amirali. "The Impact of Geopolitical Risks on Equity Markets and Financial Stress: A Comparative Analysis of Emerging and Advanced Economies." International Journal of Economics and Business Administration 2025, vol. 13, no. 1, 30-41.
  4. Maimaitijiang, Sairidaer, Yichen Shen, and Xiaoyang Yao. "Impacts of Geopolitical Risk on China Stock Market: A Dynamic Resilience Analysis." Procedia Computer Science 2024, vol. 242, 318-325.
  5. Lamine, Ahlem, and Sirine Zribi. "Do Geopolitical Risks Affect Stock Market Returns and Volatilities: An Analysis Based on the TVP-VAR Model." European Journal of Government and Economics 2024, vol. 13, no. 2, 240-261.
  6. Böyükaslan, A., R. Demirer, E. B. Ergüney, and S. Gursoy. "Geopolitical Risks and the Energy-Stock Market Nexus: Evidence from Turkiye." Borsa Istanbul Review 2024, vol. 24, no. 1, 73-83.
  7. Panazan, Oana, Catalin Gheorghe, and Emilia Calefariu. "Geopolitical Risks and Stock Market Volatility in the SAARC Region." Economics 2024, vol. 18, no. 1, 20220124.
  8. NguyenHuu, Tam, and Deniz Karaman Örsal. "Geopolitical Risks and Financial Stress in Emerging Economies." The World Economy 2024, vol. 47, no. 1, 217-237.
  9. Panazan, Oana, and Catalin Gheorghe. "Impact of Geopolitical Risk on G7 Financial Markets: A Comparative Wavelet Analysis Between 2014 And 2022." Mathematics 2024, vol. 12, no. 3, 370.
  10. Hu, Yang, Shaen Corbet, Yang Hou, Chunlin Lang, and Les Oxley. "Tail Risk Connectedness During Geopolitical Shocks: Assessing the Impact of Russian-Ukraine Conflict on G7 Stock Markets." Applied Economics 2025, vol. 57, no. 47, 7705-7733.
  11. Panazan, Oana, and Catalin Gheorghe. "Impact of Geopolitical Risks and Innovation on Global Defense Stock Return." PloS One 2025, vol. 20, no. 2, e0312155.
  12. Shawon, Reza E. Rabbi, Hossain Mohammad Dalim, Sanjib Kumar Shil, Nisha Gurung, Muhammad Hasanuzzaman, Saddam Hossain, and Tauhedur Rahman. "Assessing Geopolitical Risks and their Economic Impact on the USA using Data Analytics." Journal of Economics, Finance and Accounting Studies 2024, vol. 6, no. 6, 05-16.
  13. Medhioub, Imed. "Impact of Geopolitical Risks on Herding Behavior in some MENA Stock Markets." Journal of Risk and Financial Management 2025, vol. 18, no. 2, 85.
  14. Su, Xiaomei, Ummara Razi, Shangmei Zhao, Wei Li, Xiao Gu, and Jiale Yan. "Geopolitical Risk and Energy Markets in China." International Review of Financial Analysis 2025, vol. 103, 104187.
  15. Gong, Xiao-Li, Hao-Yang Ning, and Xiong Xiong. "Research on the Cross-Contagion Between International Stock Markets and Geopolitical Risks: the Two-Layer Network Perspective." Financial Innovation 2025, vol. 11, no. 1, 23.
  16. Gopal, Suresh, Viswanathan Thangaraj, Naveen Kumara R, and Rupa R. "Geopolitical Shockwaves: the Russia-Ukraine War’s Impact on BRICS Financial Markets." Cogent Economics & Finance 2025, vol. 13, no. 1, 2476096.
  17. Eissa, Mohamed Abdelaziz, and Hisham Al Refai. "Context-Dependent Responses to Geopolitical Risk in Middle Eastern and African Stock Markets: An Asymmetric Volatility Spillover Study." International Review of Economics & Finance 2024, vol. 94, 103402.
  18. Ayadi, Ezer, and Noura Ben Mbarek. "The Dynamic Effects of Economic Uncertainties and Geopolitical Risks on Saudi Stock Market Returns: Evidence from Local Projections." Journal of Risk and Financial Management 2025, vol. 18, no. 5, 264.
  19. Agbede, Oluwole Oluwadamilola, Experience Efeosa Akhigbe, Ajibola Joshua Ajayi, and N. S. Egbuhuzor. "Financial Modeling for Global Energy Market Impacts of Geopolitical Events and Economic Regulations." Magna Scientia Advanced Research and Reviews 2024, vol. 10, no. 2, 272-296.
  20. Marobhe, Mutaju Isaack, Jonathan Mukiza Kansheba, and Ziaul Haque Munim. "Geopolitical Uncertainty and Shipping Stock Returns: An Event Study of the Israel-Hamas Conflict." Journal of Transport Geography 2025, vol. 123, 104122.
  21. Chatziantoniou, Ioannis, David Gabauer, and Alexis Stenfors. "US Sectoral Stock Market Volatility and Geopolitical Risk Categories." Finance Research Letters 2025, vol. 76, 106916.
  22. Helmi, Mohamad Husam, Ahmed H. Elsayed, and Rabeh Khalfaoui. "The Impact of Geopolitical Risk on Sustainable Markets: A Quantile-Time-Frequency Analysis." Finance Research Letters 2024, vol. 64, 105380.
  23. Blasco, Natividad, Luis Casas, and Sandra Ferreruela. "Does War Spread the Herding Effect in Stock Markets Evidence from Emerging and Developed Markets During the Russia-Ukraine War." Finance Research Letters 2024, vol. 63, 105365.
  24. Enescu, Adrian-Gabriel, and Monica Răileanu Szeles. "Geopolitical Risks and Global Stock Market Dynamics: A Quantile-based Approach." International Journal of Financial Studies 2026, vol. 14, no. 4, 85.
  25. Wang, Yu. "The Relationship between Geopolitical Risks and Stock Market Volatility." Frontiers 2024, vol. 17, no. 3, 379-385.