Spillover Effects of Global Crude Oil Price Volatility on Base Metal Exports in Selected Mineral-Rich Countries
Keywords:
PSTR model, Base metal exports, Economic policy uncertainty, Economic complexity , Geopolitical risk, Oil price volatilityAbstract
Objective: This study aims to examine the linear and nonlinear spillover effects of global crude oil price volatility on base metal exports, emphasizing the threshold role of geopolitical risk in selected mineral-rich countries.
Methodology: The study employs annual panel data for selected countries endowed with mineral and base metal resources over the period 2005–2024. Oil price volatility is extracted using conditional volatility models, and the Panel Smooth Transition Regression (PSTR) approach is applied to capture both linear and nonlinear dynamics. Geopolitical risk is introduced as the transition variable, while economic complexity, institutional quality, economic policy uncertainty, capital formation, labor, and energy consumption are incorporated as key explanatory variables.
Findings: The PSTR estimation results indicate that oil price volatility, geopolitical risk, and economic policy uncertainty exert statistically significant negative effects on base metal exports. Conversely, institutional quality, economic complexity, capital, labor, and energy consumption have significant positive impacts. The results also confirm the existence of a meaningful geopolitical risk threshold, beyond which the adverse effects of oil price volatility and policy uncertainty intensify, while the mitigating role of institutional and structural factors becomes stronger.
Conclusion: The findings suggest that sustaining base metal exports in mineral-rich countries critically depends on managing oil price volatility, mitigating geopolitical risks, and reducing policy uncertainty, while strengthening institutional quality and economic complexity enhances resilience against external shocks.
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Copyright (c) 2025 Seyed Mohammad Hassani, Marjan Damankeshideh, Amir Reza Keyghobadi, Seyed Nematollah Mousavi (Author)
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