The role of G7 and BRICS country risks on critical metals: Evidence from time- and frequency-domain approach

Wang Gao, Haizhen Zhang, Hongwei Zhang and Shixiong Yang

Resources Policy, 2024, vol. 88, issue C

Abstract: In the context of fierce international competition, country risks continue rising, conducting the supply of critical metals becomes increasingly unstable. The global supply security of critical metals is also facing severe challenges. This paper utilizes a novel TVP-VAR time-frequency connectedness approach to examine the spillover effect of country risk (political, economic, and financial risk) on critical metals in G7 and BRICS countries. The results show a strong connectedness of country risks on the return of critical metals. From the static perspective, the short-term spillover effects of BRICS political risk on critical metals are more significant, especially for tungsten and rare earth. In the long run, the US and UK are the dominant drivers of spillover effects, whereby their economic and financial risks exert a significant impact. The net spillover connectedness network shows that the BRICS countries are net exporters of political risk, mainly China and Russia. The G7 countries are emitters of economic and financial risk. From the dynamic perspective, the spillover effect of country risks on critical metals is time-varying and significantly enhanced during the crisis. The Russian-Ukraine war made Russia's political risk reach the strongest, and there is still a clear upward trend even in the long run. Our research findings are of great significance for national security and development, as well as for investors in formulating investment portfolios.

Keywords: Country risk; Critical metals; TVP-VAR; Connectedness (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420723009686
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:88:y:2024:i:c:s0301420723009686

DOI: 10.1016/j.resourpol.2023.104257

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().