The global geopolitical-energy uncertainty index and total factor productivity: New evidence from firm-level analysis
Dang T.H.N. Balli F. Balli H.O. Qiu M. Nguyen H.
January 2026Elsevier B.V.
Energy Economics
2026#153
This paper examines the impact of the global geopolitical-energy uncertainty (GEU) on firm-level total factor productivity, considering variation across countries, industries, and firm sizes. Employing the novel GEU index proposed by Dang et al. (2024a) and firm-level annual data from 2001 to 2023, we find strong evidence that the GEU index negatively affects firm productivity. There is heterogeneity in the GEU indexs impact. Firms in developed countries such as the US, UK, France, and Germany are more negatively affected, whereas Canadian firms show a positive response. Energy-intensive firms and smaller firms experience stronger negative impacts. Mechanism analysis further demonstrates that both firm level characteristics and macroeconomic energy conditions shape productivity responses to GEU. Higher profitability reduces the negative impact of GEU shocks, while higher cost intensity and higher global energy prices amplify the adverse effects, increasing productivity losses. Our baseline results remain robust under different robustness checks. The papers findings offer guidance for firms to develop effective strategies to manage risks during periods of heightened geopolitical-energy uncertainty.
Energy uncertainty , Firm productivity , Geopolitical energy uncertainty , Geopolitical risks , Total factor productivity
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School of Accountancy, Economics and Finance, Massey University, East Precinct, Albany Expressway, Albany, Auckland, 0632, New Zealand
Department of Financial and Business Systems, Lincoln University, Lincoln 7647, Canterbury, New Zealand
Higher School of Economics and BusinessAl-Farabi Kazakh National University, Almaty, Kazakhstan
School of Accountancy
Department of Financial and Business Systems
Higher School of Economics and BusinessAl-Farabi Kazakh National University
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