Most of us have geopolitics in our models. But are we measuring the same thing?
Flladina Zilja co-authors new article
UN voting data has been downloaded over 165,000 times. The geopolitical risk index is increasing in application. Yet, when you actually compare them, they're nearly uncorrelated.One finding of our work is that the GPR index assigns similar geopolitical risk to US allies like Germany and the UK as to adversaries like China. Use it naively for cross-country comparisons, and you'd conclude US firms face more geopolitical risk in Berlin than in Beijing. The measures aren't substitutes. They capture fundamentally different facets of geopolitics. Our new paper in Journal of International Business Policy evaluates UNGA voting against the GPR index and sanctions data, and offers a practical decision framework for when to use which.
If geopolitics is in your models, this paper by Kofi Gilbert Adarkwah, Christopher Sabel, and Flladina Zilja is worth a read.
