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The role of ESG in the decision to stay or leave the market of an invading country: The case of Russia

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  • Basnet, Anup
  • Blomkvist, Magnus
  • Galariotis, Emilios

Abstract

We study firms’ decisions to stay or leave the Russian market amid the invasion of Ukraine. Lower ESG scores increase the likelihood of keeping the Russian operations unchanged. Higher scores lead to less negative stock market reactions following complete exits.

Suggested Citation

  • Basnet, Anup & Blomkvist, Magnus & Galariotis, Emilios, 2022. "The role of ESG in the decision to stay or leave the market of an invading country: The case of Russia," Economics Letters, Elsevier, vol. 216(C).
    • Handle: RePEc:eee:ecolet:v:216:y:2022:i:c:s0165176522002026
    DOI: 10.1016/j.econlet.2022.110636
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    References listed on IDEAS

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    Cited by:

    1. Silva, Thiago Christiano & Wilhelm, Paulo Victor Berri & Tabak, Benjamin Miranda, 2023. "Trade matters except to war neighbors: The international stock market reaction to 2022 Russia’s invasion of Ukraine," Research in International Business and Finance, Elsevier, vol. 65(C).
    2. Biermann, Marcus & Leromain, Elsa, 2023. "The indirect effect of the Russian-Ukrainian war through international linkages: early evidence from the stock market," LSE Research Online Documents on Economics 121332, London School of Economics and Political Science, LSE Library.
    3. Lian, Yonghui & He, Xiaoyue & Gao, Jieying, 2023. "Do customer ESG performance affect supplier innovation? Evidence from China's listed firms," Economics Letters, Elsevier, vol. 233(C).
    4. Hossain, Ashrafee T. & Masum, Abdullah-Al & Saadi, Samir, 2024. "The impact of geopolitical risks on foreign exchange markets: Evidence from the Russia–Ukraine war," Finance Research Letters, Elsevier, vol. 59(C).
    5. Kudryashov, Alexander, 2023. "ESG Transformation: A Roadmap for Russia’s Sustainable Development /– Tallinn : OPEN EUROPEAN ACADEMY OF PUBLIC SCIENCES OÜ, 2023," OSF Preprints 6j8ux, Center for Open Science.
    6. Hu, Yang & Lang, Chunlin & Corbet, Shaen & Hou, Yang (Greg) & Oxley, Les, 2023. "Exploring the dynamic behaviour of commodity market tail risk connectedness during the negative WTI pricing event," Energy Economics, Elsevier, vol. 125(C).
    7. Caterina Lucarelli & Sabrina Severini, 2024. "Anatomy of the chimera: Environmental, Social, and Governance ratings beyond the myth," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4198-4217, July.
    8. Marcus Biermann & Elsa Leromain, 2023. "The indirect effect of the Russian-Ukrainian war through international linkages: early evidence from the stock market," CEP Discussion Papers dp1899, Centre for Economic Performance, LSE.
    9. Hayakawa,Kazunobu & Kumagai,Satoru, 2022. "The trade effect of economic sanctions: evidence from the 2022 Russia-Ukraine conflict," IDE Discussion Papers 857, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. Pandey, Dharen Kumar & Assaf, Rima & Rai, Varun Kumar, 2023. "Did the Indian stock market sail the Russia-Ukraine storm safely?," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).

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    More about this item

    Keywords

    Russian invasion; ESG; Human rights scores; Market exit; Stock market reaction;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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