The impact of the geopolitical risks on the stock market; an application on selected countries

Abstract

Geopolitical risk occurs when a threat arises to normal relations between countries and regions. Geopolitical risks create serious concern in almost every region of the world. Political, economic and social events taking place in the national and international arena, which feed these concerns, also significantly determine the nature of geopolitical risks. Financial markets are significantly affected by geopolitical risks that will affect country economies. When the risk level increases, uncertainties increase and investors operating in financial markets stop their investments with the concern of experiencing losses. Recently, the Covid'19 epidemic and the Russia-Ukraine war have had an increasing effect on geopolitical risk.