 The Stock Market Effects of the 2022 Russia Sanctions: Evidence from the US and the EUMatthijs Leusen, Harry Garretsen, Francesco Giumelli and Tristan Kohl No 12650, CESifo Working Paper Series from CESifo Abstract: We examine how Western sanctions imposed in response to Russia’s 2022 invasion of Ukraine shaped firm-level stock market performance in the EU and the US. To measure sanction exposure, we link firms to the specific products targeted by US and EU sanctions at the HS6 level, producing a detailed, firm-level indicator. We use a classical finance event study to analyze investor reactions around three salient moments in the pre-invasion period: Biden’s initial sanction threat, the collapse of US-Russia diplomatic talks, and the first sanctions announcement. We complement this with a staggered difference-indifferences design that exploits cross-firm variation in the timing of product level listings to trace the effects of sanctions as they accumulated over time. Stock market losses in the EU are substantially larger than in the US, and the gap between sanctioned and non-sanctioned firms is modest and shortlived. Investors price in sanction risk ahead of formal implementation, and subsequent expansions of existing sanction regimes generate little additional market response. Keywords: economic sanctions; event study; geopolitical risk; Russia-Ukraine war; anticipation effects; sender costs (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12650 Access Statistics for this paper More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC. |
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