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Heterogeneous impacts of wars on global equity markets: Evidence from the invasion of Ukraine

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  • Boubaker, Sabri
  • Goodell, John W.
  • Pandey, Dharen Kumar
  • Kumari, Vineeta

Abstract

Using an event study methodology to examine the impact of the 2022 Russian invasion of Ukraine, we find that this invasion generated negative cumulative abnormal returns for global stock market indices, but with heterogeneous effects. Cross-sectional analysis reveals that economic globalization as measured by GDP-scaled trade is negatively associated with event-day and post-event returns. Consistent with the expected economic stimulus of military preparedness, markets of NATO countries exhibited higher returns. Results are consistent with markets of more globalized economies being more vulnerable to international conflicts, with, however, notable heterogeneities.

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  • Boubaker, Sabri & Goodell, John W. & Pandey, Dharen Kumar & Kumari, Vineeta, 2022. "Heterogeneous impacts of wars on global equity markets: Evidence from the invasion of Ukraine," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001969
    DOI: 10.1016/j.frl.2022.102934
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    More about this item

    Keywords

    Ukraine conflict; Conflicts and equity markets; Event study; Abnormal returns; Globalization;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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