<p>This study delves into the interplay between geopolitical risk and the globalization index in six advanced Asian economies: Australia, Hong Kong SAR (China), Japan, the Korean Republic, New Zealand, and Singapore, from 1996 to 2021. This study controls for gross fixed capital formation, governance quality, and economic growth. Using Driscoll-Kraay Standard Errors and the Feasible Generalized Least Squares techniques, it finds positive effects of economic growth and geopolitical risk on globalization, while gross fixed capital formation and governance quality adversely affect globalization. The policy implications highlight the need for proactive measures to mitigate geopolitical risk, prioritize sustainable economic growth, optimize gross fixed capital investment, and enhance governance quality. The&#xa0;policymakers in advanced Asia should consider developing strategies that reduce the volatility of geopolitical factors, such as strengthening international cooperation, fostering regional stability, and implementing crisis management frameworks. Additionally, a more targeted approach to gross capital investment is necessary to ensure that gross fixed capital formation promotes globalization without increasing economic inefficiencies or fostering protectionist tendencies. Improving governance quality, particularly by enhancing transparency, reducing corruption, and strengthening institutional frameworks, is crucial to facilitating more resilient and inclusive globalization. Furthermore, governments in advanced Asia should aim to integrate policies that align with long-term sustainable growth while ensuring that economic development does not come at the cost of social and environmental stability. By addressing these factors, policymakers can create a conducive environment for globalization that promotes economic prosperity, reduces risks, and enhances global connectivity.</p>

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Does Geopolitical Risk Promote Globalisation? Evidence from Advanced Asian Economies

  • Shreya Pal,
  • Mantu Kumar Mahalik

摘要

This study delves into the interplay between geopolitical risk and the globalization index in six advanced Asian economies: Australia, Hong Kong SAR (China), Japan, the Korean Republic, New Zealand, and Singapore, from 1996 to 2021. This study controls for gross fixed capital formation, governance quality, and economic growth. Using Driscoll-Kraay Standard Errors and the Feasible Generalized Least Squares techniques, it finds positive effects of economic growth and geopolitical risk on globalization, while gross fixed capital formation and governance quality adversely affect globalization. The policy implications highlight the need for proactive measures to mitigate geopolitical risk, prioritize sustainable economic growth, optimize gross fixed capital investment, and enhance governance quality. The policymakers in advanced Asia should consider developing strategies that reduce the volatility of geopolitical factors, such as strengthening international cooperation, fostering regional stability, and implementing crisis management frameworks. Additionally, a more targeted approach to gross capital investment is necessary to ensure that gross fixed capital formation promotes globalization without increasing economic inefficiencies or fostering protectionist tendencies. Improving governance quality, particularly by enhancing transparency, reducing corruption, and strengthening institutional frameworks, is crucial to facilitating more resilient and inclusive globalization. Furthermore, governments in advanced Asia should aim to integrate policies that align with long-term sustainable growth while ensuring that economic development does not come at the cost of social and environmental stability. By addressing these factors, policymakers can create a conducive environment for globalization that promotes economic prosperity, reduces risks, and enhances global connectivity.