The profits vs protests: Corporate value dynamics amidst activist uproar

Joseph French, Constantin Gurdgiev and Seungho Shin

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: We examine the impact of student protests and geopolitical events on the firms targeted for divestment during the 2023–2024 Israel–Hamas conflict. Utilizing event study methodology, we analyze cumulative abnormal returns (CARs) across eight key conflict periods. We find positive CARs for targeted firms at the onset of the conflict, but significant negative CARs are reported as student protests escalated. This provides evidence of the tangible impacts of public pressure campaigns on market perceptions and valuations in the short-run. However, we observe positive CARs after student protests subsided which suggests potential limitations to the sustained impact of such activism and shows the market's capacity to normalize extraordinary events over time.

Keywords: Divestment; Market adaptation; Geopolitical conflict; Activism (search for similar items in EconPapers)
JEL-codes: F51 G14 G41 M14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012923

DOI: 10.1016/j.frl.2024.106263

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