Implications of War on the Global Economy: A Geopolitical Perspective

DOI

10.2991/978-2-38476-559-1_35How to use a DOI?

Keywords

Geopolitical risk; Energy volatility; Social media sentiment; PLS-SEM; Stock returns; Emerging economies

Abstract

Purpose:Geopolitical conflicts, such as the Russia-Ukraine War and the US-China Trade War, have contributed to economic fragmentation and triggered sector-specific disruptions, particularly in energy, defence, and agriculture. While existing literature has largely focused on macroeconomic outcomes and market-level trends, limited attention has been paid to the behavioural and perception-driven mechanisms underlying market responses during such crises. This study addresses this gap by leveraging primary data to examine three core research questions: (1) the negative impact of geopolitical risk (GPR) on stock returns during conflict; (2) the transmission of volatility between energy and financial markets; and (3) the mediating role of social media sentiment in shaping market performance in emerging economies.

Methods:Primary data was collected through an online questionnaire (N = 192) using Likert-scale questions to measure respondents’ attitudes and perceptions. The statistical method PLS-SEM (Partial Least Squares Structural Equation Modelling) was used to test the primary data. This study reviewed scholarly articles from academic databases like Scopus, Web of Science, and IEEE to develop a conceptual foundation. In addition, macroeconomic trends and industry insights were drawn from sources such as McKinsey, Deloitte, Statista, and Financial Express to support the overall analysis and contextualise the findings.

Results:The questionnaire demonstrated strong construct validity, with Cronbach’s alpha scores of 0.742 (H1) and 0.821 (H2). Composite reliability (ρₐ: 0.842, 0.863; ρ_c: 0.819, 0.894), and Average Variance Extracted (0.412; 0.740) also validated this.

Conclusion:Findings support H1 and H2, confirming GPR’s negative effect on stock returns and the presence of volatility spillovers. While H3 yielded more tentative results, the study contributes novel empirical insight into the underexplored role of social media sentiment during conflict, laying the groundwork for future research.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Mannat Chauhan
AU  - Shweta Loonkar
AU  - Karishma Desai
PY  - 2026
DA  - 2026/04/19
TI  - Implications of War on the Global Economy: A Geopolitical Perspective
BT  - Proceedings of the Global Innovation and Technology Summit “AAROHAN 3.0”_HSS track (GITS-HSS 2025)
PB  - Atlantis Press
SP  - 537
EP  - 552
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-559-1_35
DO  - 10.2991/978-2-38476-559-1_35
ID  - Chauhan2026
ER  -