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

Pelin Öge Güney

Natural Resources Forum, 2025, vol. 49, issue 2, 2097-2110

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.

Date: 2025
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https://doi.org/10.1111/1477-8947.12596

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Persistent link: https://EconPapers.repec.org/RePEc:wly:natres:v:49:y:2025:i:2:p:2097-2110

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