Corporate decisions in times of war: Evidence from the Russia-Ukraine conflict

Onur Kemal Tosun and Arman Eshraghi

Finance Research Letters, 2022, vol. 48, issue C

Abstract: Despite sanctions and public demand for companies to exit the Russian market due to its 2022 invasion of Ukraine, several firms chose to keep their businesses operating in Russia. We investigate the financial market reaction to announcements of companies remaining in Russia during the eventful two weeks following the invasion. Our findings show that a portfolio of remainers underperforms the leavers and the market benchmark. Investors impose a significant market penalty on the remainers. There is evidence of higher trading volume and selling pressure on remainers, suggesting equity markets are acutely sensitive to corporate decisions in times of political conflict.

Keywords: Sanctions; Market reaction; Corporate decisions; Ukraine; Russia (search for similar items in EconPapers)
JEL-codes: G10 G18 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001908

DOI: 10.1016/j.frl.2022.102920

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