{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,6,17]],"date-time":"2026-06-17T17:40:22Z","timestamp":1781718022797,"version":"3.54.5"},"reference-count":28,"publisher":"MDPI AG","issue":"11","license":[{"start":{"date-parts":[[2025,10,24]],"date-time":"2025-10-24T00:00:00Z","timestamp":1761264000000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Systems"],"abstract":"<jats:p>This paper investigates how geopolitical risk influences firm profitability worldwide. Using a global panel of 7126 listed companies from 2013 to 2023, the analysis reveals that geopolitical shocks do not affect firms uniformly. Less profitable and financially fragile firms experience the strongest declines in profitability when geopolitical tensions rise, while more profitable firms show greater resilience and, in some cases, strategic gains. The results also indicate that financial structure, liquidity, tangibility, and innovation capacity explain much of this heterogeneity, highlighting that vulnerability is rooted in both balance sheet fragility and adaptive capability. These findings suggest that geopolitical instability reinforces performance asymmetries across firms and industries, with implications for corporate strategy, investor behavior, and financial stability in an increasingly uncertain global environment.<\/jats:p>","DOI":"10.3390\/systems13110945","type":"journal-article","created":{"date-parts":[[2025,10,30]],"date-time":"2025-10-30T03:44:39Z","timestamp":1761795879000},"page":"945","update-policy":"https:\/\/doi.org\/10.3390\/mdpi_crossmark_policy","source":"Crossref","is-referenced-by-count":2,"title":["Geopolitical Risk and Firm Profitability in Complex Socio-Economic Systems: A Heterogeneous Dynamics Perspective"],"prefix":"10.3390","volume":"13","author":[{"ORCID":"https:\/\/orcid.org\/0000-0002-7242-7623","authenticated-orcid":false,"given":"Ioana","family":"Duca","sequence":"first","affiliation":[{"name":"Department of Finance, Banking and Business Administration, Titu Maiorescu University, 040051 Bucharest, Romania"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"ORCID":"https:\/\/orcid.org\/0000-0003-0891-2090","authenticated-orcid":false,"given":"Bogdan Andrei","family":"Dumitrescu","sequence":"additional","affiliation":[{"name":"\u201cVictor Sl\u0103vescu\u201d Centre for Financial and Monetary Research, Calea 13 Septembrie, 050711 Bucharest, Romania"},{"name":"Faculty of Finance and Banking, Bucharest University of Economic Studies, Pia\u021ba Roman\u0103 6, 010374 Bucharest, Romania"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Paul","family":"T\u0103n\u0103sescu","sequence":"additional","affiliation":[{"name":"Faculty of Finance and Banking, Bucharest University of Economic Studies, Pia\u021ba Roman\u0103 6, 010374 Bucharest, Romania"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"ORCID":"https:\/\/orcid.org\/0009-0000-1999-0145","authenticated-orcid":false,"given":"Ionel","family":"Leonida","sequence":"additional","affiliation":[{"name":"\u201cVictor Sl\u0103vescu\u201d Centre for Financial and Monetary Research, Calea 13 Septembrie, 050711 Bucharest, Romania"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Andreea-M\u0103d\u0103lina","family":"Bozagiu","sequence":"additional","affiliation":[{"name":"Faculty of Finance and Banking, Bucharest University of Economic Studies, Pia\u021ba Roman\u0103 6, 010374 Bucharest, Romania"}],"role":[{"vocabulary":"crossref","role":"author"}]},{"ORCID":"https:\/\/orcid.org\/0009-0008-1584-7550","authenticated-orcid":false,"given":"Dalia","family":"Poleac","sequence":"additional","affiliation":[{"name":"Faculty of Business Administration in Foreign Languages, Bucharest University of Economic Studies, 010961 Bucharest, Romania"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"1968","published-online":{"date-parts":[[2025,10,24]]},"reference":[{"key":"ref_1","doi-asserted-by":"crossref","first-page":"1194","DOI":"10.1257\/aer.20191823","article-title":"Measuring Geopolitical Risk","volume":"112","author":"Caldara","year":"2022","journal-title":"Am. Econ. Rev."},{"key":"ref_2","first-page":"1125","article-title":"Geopolitical risk and investment","volume":"55","author":"Wang","year":"2023","journal-title":"J. Money Credit Bank."},{"key":"ref_3","doi-asserted-by":"crossref","first-page":"101149","DOI":"10.1016\/j.ememar.2024.101149","article-title":"Geopolitical risk and the cost of capital in emerging economies","volume":"61","author":"Carney","year":"2024","journal-title":"Emerg. Mark. Rev."},{"key":"ref_4","doi-asserted-by":"crossref","first-page":"101951","DOI":"10.1016\/j.najef.2023.101951","article-title":"Geopolitical risk and firm value: Evidence from emerging markets","volume":"68","author":"Pringpong","year":"2023","journal-title":"N. Am. J. Econ. Financ."},{"key":"ref_5","doi-asserted-by":"crossref","first-page":"106332","DOI":"10.1016\/j.jbankfin.2021.106332","article-title":"The exclamation mark of Cain: Risk salience and mutual fund flows","volume":"134","author":"Mugerman","year":"2022","journal-title":"J. Bank. Financ."},{"key":"ref_6","doi-asserted-by":"crossref","first-page":"103188","DOI":"10.1016\/j.irfa.2024.103188","article-title":"Executive characteristics as moderators: Exploring the impact of geopolitical risk on capital structure decisions","volume":"93","author":"Yaghoubi","year":"2024","journal-title":"Int. Rev. Financ. Anal."},{"key":"ref_7","doi-asserted-by":"crossref","first-page":"221","DOI":"10.1007\/s11187-019-00294-y","article-title":"Operating leverage and profitability of SMEs: Agri-food industry in Europe","volume":"57","author":"Grau","year":"2021","journal-title":"Small Bus. Econ."},{"key":"ref_8","doi-asserted-by":"crossref","first-page":"101068","DOI":"10.1016\/j.najef.2019.101068","article-title":"Firm-specific, industry-specific and macroeconomic factors of life insurers profitability","volume":"51","author":"Killins","year":"2020","journal-title":"N. Am. J. Econ. Financ."},{"key":"ref_9","doi-asserted-by":"crossref","first-page":"101390","DOI":"10.1016\/j.bar.2024.101390","article-title":"The determinants of corporate cost of debt during a financial crisis","volume":"56","author":"Tanin","year":"2024","journal-title":"Br. Account. Rev."},{"key":"ref_10","doi-asserted-by":"crossref","first-page":"2166969","DOI":"10.1080\/1331677X.2023.2166969","article-title":"Determinants of S.M.E.s capital structure in the Visegrad group","volume":"36","author":"Pham","year":"2023","journal-title":"Econ. Res.-Ekon. Istra\u017eivanja"},{"key":"ref_11","doi-asserted-by":"crossref","first-page":"3934","DOI":"10.1002\/ijfe.2352","article-title":"Trade credit and firm profitability: Empirical evidence from India","volume":"27","author":"Baker","year":"2022","journal-title":"Int. J. Financ. Econ."},{"key":"ref_12","doi-asserted-by":"crossref","first-page":"749","DOI":"10.1080\/1351847X.2024.2433017","article-title":"Is zero leverage good for firms performance?","volume":"31","author":"Morais","year":"2025","journal-title":"Eur. J. Financ."},{"key":"ref_13","first-page":"63","article-title":"What determines intragroup debt financing","volume":"27","year":"2024","journal-title":"Rev. Contab. Span. Account. Rev."},{"key":"ref_14","first-page":"41","article-title":"Valuing the Interest Tax Shield in the Central European Economies: Panel Data Approach","volume":"14","author":"Kovacova","year":"2022","journal-title":"J. Compet."},{"key":"ref_15","first-page":"626","article-title":"The effect of the number of bank relationships on firm leverage: High-risk shift and the curse of mainstream banks","volume":"15","author":"Dinc","year":"2022","journal-title":"Int. J. Islam. Middle East. Financ. Manag."},{"key":"ref_16","doi-asserted-by":"crossref","first-page":"1141","DOI":"10.1002\/ijfe.2727","article-title":"Bank market power and performance of financial technology firms","volume":"29","author":"Andrikopoulos","year":"2024","journal-title":"Int. J. Financ. Econ."},{"key":"ref_17","doi-asserted-by":"crossref","first-page":"634","DOI":"10.1016\/j.iref.2023.07.005","article-title":"Factors affecting trade credit in India","volume":"88","author":"Pattnaik","year":"2023","journal-title":"Int. Rev. Econ. Financ."},{"key":"ref_18","doi-asserted-by":"crossref","first-page":"4136","DOI":"10.1002\/mde.3934","article-title":"Do the same executive compensation strategies and policies fit all the firms in the banking industry? New empirical insights from the CEO pay\u2013firm performance causal nexus","volume":"44","author":"Olaniyi","year":"2023","journal-title":"Manag. Decis. Econ."},{"key":"ref_19","doi-asserted-by":"crossref","first-page":"60","DOI":"10.1002\/agr.21876","article-title":"Predicting acquirers of US food and agribusiness firms","volume":"41","author":"Mukhopadhyay","year":"2025","journal-title":"Agribusiness"},{"key":"ref_20","doi-asserted-by":"crossref","first-page":"14","DOI":"10.1080\/00213624.2021.1873045","article-title":"Corporate Profits and Investment in Light of Institutional and Stock Market Turmoil: New Evidence from the Warsaw Stock Exchange","volume":"55","author":"Malinowska","year":"2021","journal-title":"J. Econ. Issues"},{"key":"ref_21","doi-asserted-by":"crossref","first-page":"1761","DOI":"10.1080\/00036846.2024.2316120","article-title":"The impact of economic policy uncertainty on the profitability of textile industry: Evidence from BRIC countries","volume":"57","author":"Ova","year":"2025","journal-title":"Appl. Econ."},{"key":"ref_22","doi-asserted-by":"crossref","first-page":"107247","DOI":"10.1016\/j.eneco.2023.107247","article-title":"The effects of polluting behaviour, dirty energy and electricity consumption on firm performance: Evidence from the recent crises","volume":"129","author":"Pham","year":"2024","journal-title":"Energy Econ."},{"key":"ref_23","doi-asserted-by":"crossref","first-page":"33","DOI":"10.2307\/1913643","article-title":"Regression quantiles","volume":"46","author":"Koenker","year":"1978","journal-title":"Econometrica"},{"key":"ref_24","doi-asserted-by":"crossref","first-page":"74","DOI":"10.1016\/j.jmva.2004.05.006","article-title":"Quantile regression for longitudinal data","volume":"91","author":"Koenker","year":"2004","journal-title":"J. Multivar. Anal."},{"key":"ref_25","doi-asserted-by":"crossref","first-page":"953","DOI":"10.3982\/ECTA6822","article-title":"Unconditional quantile regressions","volume":"77","author":"Firpo","year":"2009","journal-title":"Econometrica"},{"key":"ref_26","doi-asserted-by":"crossref","first-page":"403","DOI":"10.1177\/1536867X1601600208","article-title":"Fixed Effects in Unconditional Quantile Regression","volume":"16","author":"Borgen","year":"2016","journal-title":"Stata J."},{"key":"ref_27","doi-asserted-by":"crossref","first-page":"1450","DOI":"10.1016\/j.econmod.2012.02.014","article-title":"Testing for Granger non-causality in heterogeneous panels","volume":"29","author":"Dumitrescu","year":"2012","journal-title":"Econ. Model."},{"key":"ref_28","doi-asserted-by":"crossref","first-page":"200","DOI":"10.1016\/j.jeconom.2020.12.001","article-title":"Difference-in-Differences with multiple time periods","volume":"225","author":"Callaway","year":"2021","journal-title":"J. Econom."}],"container-title":["Systems"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/www.mdpi.com\/2079-8954\/13\/11\/945\/pdf","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,10,30]],"date-time":"2025-10-30T04:17:13Z","timestamp":1761797833000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.mdpi.com\/2079-8954\/13\/11\/945"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2025,10,24]]},"references-count":28,"journal-issue":{"issue":"11","published-online":{"date-parts":[[2025,11]]}},"alternative-id":["systems13110945"],"URL":"https:\/\/doi.org\/10.3390\/systems13110945","relation":{},"ISSN":["2079-8954"],"issn-type":[{"value":"2079-8954","type":"electronic"}],"subject":[],"published":{"date-parts":[[2025,10,24]]}}}