Jeopolitik Riskin Pay Senedi Fiyatlarına Etkisinin Fourier Yaklaşımıyla Değerlendirilmesi: Türkiye Örneği
Evaluation with Fourier Approach of the Effect of Geopolitical Risk on Stock Prices: The Case of Turkey

Summary/Abstract: Purpose – The financial liberalization process has accelerated international capital flows. However, as a result of some economic and political uncertainties that occur in certain periods in countries, the level of financial mobility is slowing down. There is an opinion that manyfactors such as military conflicts, economic crises, political and social unrest et al. in recent years in countries with which Turkey is politically and economically related have adversely affected the development of economic activities and investment volume in Turkey. In this context, the aim of this study is to analyze the effect of Turkey geopolitical risk on Istanbul Stock Exchange sector stock prices. Design/methodology/approach – In the research, Geopolitical Risk Index as Turkeyˈs geopolitical risk indicator, Istanbul Stock Exchange Banks, Electricity, Leasing and Factoring, Food&Beverage, Holding&Investments, Wood, Paper&Printing, Chemical, Petrol&Plastic, Metal Main, Metal Products & Machinery, Insurance, Non-Metal Mineral Products, Wholesale & Retail Trade, Textile & Leather, Tourism, Service, Transport, Financials, Industrial indexes as Istanbul Stock Exchange sector stock and Istanbul Stock Exchange 100 index were taken into consideration. The scope of the study was consisted of monthly data for the period March 1997-February 2022 and these data were analyzed with the Fourier Toda-Yamamoto causality test. Findings – In result of the study, it has been found that Turkey’s geopolitical risk affects on stock prices of Istanbul Stock Exchange 100, Leasing and Factoring, Food&Beverage, Holding&Investments, Chemical, Petrol&Plastic, Metal Main, Metal Products & Machinery, Wholesale&Retail Trade, Service, Transport and Industrial. Discussion – The results obtained in the study, it indicates that the susceptibility of the sectors to geopolitical tensions is at different levels. It is crucial for potential stock market investors to consider the impact of geopolitical risks on the sectors during the portfolio creation process in order to maximize their profits. To attract investments to country, Turkey should avoid tensions that create geopolitical risks in foreign relations, try to solve political, military and economic matters with democratic and humanitarian ways and establish an environment of trust for potential investors.

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