Accounting weekly

Research: When Geopolitical Risk Rises, Innovation Stalls

The impact of geopolitical conflict on global trade and security is clear. But how do rising geopolitical risk levels affect corporate innovation? The authors cross-referenced data from 4,625 U.S. companies over 32 years with a global index of geopolitical risk to quantify the link between geopolitics and innovation. At a high level, their analysis suggests that geopolitical risk has a substantial stifling effect on private sector innovation, in particular for companies with substantial exposure to foreign markets, and that that negative impact can persist for three to five years after the initial conflict. 

Read the full report here.