How do systematic risk spillovers reshape investment outcomes?

Miaomiao Tao, David Roubaud, Aviral Kumar Tiwari and Emilson Silva

Finance Research Letters, 2025, vol. 75, issue C

Abstract: We investigate the effects of domestic and cross-border systematic risk spillovers on corporate investment metrics, using stock indices comprising 212 energy firms across 36 countries, spanning July 1, 2009, to August 31, 2023, sourced from S&P Global Commodity Insights®. The two-layered network underscores the catastrophic consequences induced by the Russia–Ukraine conflict in Europe. Our regression results designate that systematic risk spillovers composed of domestic and cross-border risks hinder corporate real investments while encouraging new investments and diminishing inefficiencies. Yet geopolitical risk amplifies these risks, leading to broader disruptions in investment behaviors.

Keywords: Financial stability; Domestic and external risk spillovers; Complex network (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325000741

DOI: 10.1016/j.frl.2025.106809

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