Finance in the Age of Strategic Rivalry: Capital Flows, Power Politics, and the Reconfiguration of Global Economic Order

Abstract

This study examined the relationship between strategic rivalry, geopolitical risk, and global capital flows within the reconfiguration of the international economic order. The research applied a quantitative panel data design using a sample of 30 countries over a 10-year period, generating 300 observations. Secondary data were collected from global financial and geopolitical databases. The analysis focused on how capital flows responded to increasing geopolitical tensions, financial fragmentation, and economic uncertainty across global markets. The findings indicated that geopolitical risk (? = -0.41, p < 0.001), strategic rivalry (? = -0.36, p < 0.001), and financial fragmentation (? = -0.29, p < 0.01) significantly reduced global capital flows. Economic uncertainty also showed a strong negative effect (? = -0.33, p < 0.001), while trade openness positively influenced capital flows (? = 0.27, p < 0.01). The results demonstrated that rising geopolitical tensions reshaped investment behavior and weakened global financial integration. The study further revealed that capital allocation increasingly depended on political alignment rather than purely economic fundamentals. Financial systems showed clear signs of fragmentation and regionalization, indicating a shift toward a multipolar financial structure. The findings confirmed that strategic rivalry significantly influenced global financial stability and capital mobility. This study contributed to understanding how geopolitical forces reshaped global finance in the contemporary economic environment.