Geopolitical risks, trade openness, and energy security: Empirical evidence from 41 countries

Zhao, Xin, Zhai, Guoqing, Nasim, Asma ORCID: https://orcid.org/0000-0002-3521-5584 and Ma, Xiaowei (2025) Geopolitical risks, trade openness, and energy security: Empirical evidence from 41 countries. Energy Economics, 149. p. 108777. ISSN 0140-9883

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Abstract

In today's increasingly complex and volatile geopolitical landscape, energy security (ES) has become a critical concern for nations worldwide, such that ensuring a stable and secure energy supply is now a fundamental prerequisite for the sustainable development of national economies. Using panel data from 41 countries from 1992 to 2021 and employing a two-way fixed effects model, this paper explores the effects of geopolitical risk (GRs) on ES. From the perspective of trade openness, an intermediary effect model examines how GRs affect ES and how their relationship impacts the global economy. An empirical analysis reveals that GRs have a negative effect on ES, and the GRs coefficient of the baseline regression is −0.0825. Moreover, which conclusion is confirmed with robustness tests. Additionally, mechanism analysis indicates that GRs affect ES by limiting countries' openness to trade, and heterogeneity analysis demonstrates that the detrimental influence of GRs on ES is more pronounced in developing countries and non-IEA (International Energy Agency) countries. Further analysis suggests that GRs have a negative effect on economic development. This study provides empirical evidence for understanding the relationship between GRs and regional ES, which can help countries formulate more scientific and rational energy policies under the complex geopolitical environment, improve the level of ES, and contribute to the stabilization and sustainable development of the global energy market.