Global Geopolitical Risk and Stock Price of Shipping Firms in Korea

Abstract

This study investigates the economic impacts of Geopolitical risk(GPR), focusing on the stock prices of shipping firms listed in Korea. This study employ GPR index developed by Caldara and Iacoviello (2018) and Monthly stock price records for Korean shipping companies listed during 2000-2020. Especially, the paper examines individual Korean shipping firms in different shipping sector in response to a change in GPR. Our results show that dry bulk and container firms are adversely influenced by GPR rises. The positive impact of GPR is more pronounced for tanker firm. Although most research on geopolitical risk concentrate on the negative effect on the financial sector, the findings in this paper could provide unique insights for investors and decision makers to understand the market and nature of the shipping firms.