Strategic reactions and investor outcomes: S&P 500 companies in the wake of Russia’s 2022 invasion of Ukraine

Mike Hofmann and Daniel Kanyam

Applied Economics, 2025, vol. 57, issue 30, 4348-4361

Abstract: After Russia invaded Ukraine on 24 February 2022, a US-led international coalition imposed economic sanctions against Russia. Consequently, companies doing business in Russia had to decide how to respond. Utilizing an event study approach, this study examined how investors reacted to the initial announcements of 221 S&P 500 firms regarding their Russian business operations in response to the invasion. The findings show that companies that initially responded strongly and decided to suspend their operations in Russia saw a 2.4% adverse stock price reaction compared to companies that chose to continue their business in Russia with a scaled-down operation. Stocks of consumer discretionary and consumer staples companies performed worse in the respective industry group comparison with energy, healthcare, and materials companies. The empirical findings also indicated a weak positive relationship between investors’ reactions and the time of releasing information on a company’s initial response. The research further examined 182 S&P 500 companies to explore whether firm-level associations existed between the business size of a company in Russia and its strategic behavior. The findings indicated an association existed between thebusiness size and how a company responded and between the business size and when announcements were made.

Date: 2025
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DOI: 10.1080/00036846.2024.2359092

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