Research on the Impact of Geopolitical Risk on the Value of Chinese Listed
DOI:
https://doi.org/10.6981/FEM.202512_6(12).0016Keywords:
Geopolitical Risk; Corporate Value; Financing Constraints.Abstract
China has entered a stage of high-quality development. With the continuous advancement of high-level opening-up, the external environment increasingly exerts a substantial impact on China's economic development. Geopolitical risk stands as a significant factor among these influences. Given the important role that geopolitical activities play in corporate financial decisions-such as cash reserves, investment and financing, and research and innovation-this paper analyzes the impact of geopolitical risk on the value of Chinese listed enterprises and its underlying mechanisms. Using annual data from Chinese A-share listed companies from 2006 to 2024, this study examines the effect of the geopolitical risk index on corporate value in China and explores the mechanisms involved. The empirical results indicate that: (1) There is a significant negative correlation between the geopolitical risk index and the value of Chinese listed companies, suggesting that an increase in geopolitical risk significantly reduces corporate value. (2)The mediation mechanism test results show that geopolitical risk suppresses corporate value by exacerbating financing constraints.
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