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Financial sanctions and global stock market reaction: Evidence from the Russia-Ukraine conflict

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  • Tee, Chwee-Ming
  • Wong, Wai-Yan
  • Hooy, Chee-Wooi

Abstract

Drawing from recent studies on the effect of Russia-Ukraine war on stock markets, this study examines global stock markets’ reactions to sanctions at the beginning of the war. Using the event study methodology, this study finds that investors place higher valuation for firms located in countries that sanction Russia, in comparison with stock markets located in countries which did not sanction Russia. In addition, the higher valuation is stronger, if firms are politically connected or located in countries with lower geopolitical risks.

Suggested Citation

  • Tee, Chwee-Ming & Wong, Wai-Yan & Hooy, Chee-Wooi, 2023. "Financial sanctions and global stock market reaction: Evidence from the Russia-Ukraine conflict," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007705
    DOI: 10.1016/j.frl.2023.104398
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    Cited by:

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    2. Ghosh, Indranil & Alfaro-Cortés, Esteban & Gámez, Matías & García-Rubio, Noelia, 2024. "Reflections of public perception of Russia-Ukraine conflict and Metaverse on the financial outlook of Metaverse coins: Fresh evidence from Reddit sentiment analysis," International Review of Financial Analysis, Elsevier, vol. 93(C).

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    More about this item

    Keywords

    Russia; Ukraine; Event study; Stock market; Market return; War; Sanction;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions

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