The impact of geopolitical risk on energy security: Evidence from a GMM panel VAR approach

Energy security plays a crucial role in a country's long-term economic development. This study investigates the impact of geopolitical risks on energy security in China by employing a panel VAR model, and using provincial panel data from 1994 to 2021. The findings reveal that the relationship between geopolitical risk and energy security is dynamic and inconsistently negative. Notably, variations in regional resource endowments within China contribute to varying levels of susceptibility to geopolitical risks. Specifically, the eastern region demonstrates heightened sensitivity, experiencing significant impacts, while the western region is comparatively less affected. This study recommends Maintaining stable geopolitical risks will improve regional energy security. In addition, promoting renewable energy will also enhance national energy security. This study suggests the fluctuating relationship between geopolitical risks and energy, and suggests strengthening industrial transformation and renewable energy utilization to improve energy security.