Geopolitical Risk, Trade Fragmentation, and the Recomposition of Global Goods and Services
Prof. Wai Mun CHIA
Associate Professor of Economics
School of Social Science
Nanyang Technological University
Date: 9 December 2025 (Tuesday)
Time: 9:30-11:00
Venue: E22-G008
Host: Prof. Brenda ZHANG, Associate Professor in Business Economics
Abstract
This paper examines how geopolitical risk (GPR) reshapes the level and composition of global trade. Using PPML on product-level bilateral goods trade (1995–2023), with GPR measured by the Caldara–Iacoviello index and blocs defined via UNGA voting (U.S-leaning vs. China-leaning), we show that higher GPR depresses trade overall but with pronounced product-level heterogeneity. Elevated GPR also fragments trade: intra-bloc flows rise while inter-bloc flows fall, consistent with a re-wiring of global value chains along geopolitical lines. Complementing this, bilateral services analysis using OECD BaTIS data reveal strong sectoral reallocation: mobility-intensive services such as Transport and Travel/Public/Creative contract sharply and persistently, while Digital & IP, Finance & Risk, and Industrial support services expand in the medium run.
Speaker
Prof. Wai Mun CHIA is an Associate Professor of Economics at the School of Social Sciences in Nanyang Technological University (NTU). Her research focuses on international macroeconomics and cost-benefit analysis, with particular emphasis on monetary policy transmission, financial market dynamics, and valuation of nonmarket goods. She holds a PhD in economics from NTU, an MSc from the London School of Economics, and a BSc from the University of London. Her work has been published in reputable journals, including the Journal of International Money and Finance, Journal of Economic Behaviour and Organization, and Energy Economics. She has also co-authored books with leading publishers such as Oxford University Press.
All are welcome!
