IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v69y2024ipbs1544612324012923.html
   My bibliography  Save this article

The profits vs protests: Corporate value dynamics amidst activist uproar

Author

Listed:
  • French, Joseph J.
  • Gurdgiev, Constantin
  • Shin, Seungho

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.

Suggested Citation

  • French, Joseph J. & Gurdgiev, Constantin & Shin, Seungho, 2024. "The profits vs protests: Corporate value dynamics amidst activist uproar," Finance Research Letters, Elsevier, vol. 69(PB).
  • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012923
    DOI: 10.1016/j.frl.2024.106263
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324012923
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.frl.2024.106263?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fama, Eugene F. & French, Kenneth R., 2017. "International tests of a five-factor asset pricing model," Journal of Financial Economics, Elsevier, vol. 123(3), pages 441-463.
    2. Ghasseminejad, Saeed & Jahan-Parvar, Mohammad R., 2021. "The impact of financial sanctions: The case of Iran," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 601-621.
    3. Hannes Hofmann & Martin C. Schleper & Constantin Blome, 2018. "Conflict Minerals and Supply Chain Due Diligence: An Exploratory Study of Multi-tier Supply Chains," Journal of Business Ethics, Springer, vol. 147(1), pages 115-141, January.
    4. French, Joseph J. & Gurdgiev, Constantin & Shin, Seungho, 2023. "When doing the right thing doesn't pay: Impact of corporate decisions on Russian market participation in the wake of the Ukraine-Russia war," Finance Research Letters, Elsevier, vol. 58(PB).
    5. Kasaundra M. Tomlin, 2019. "Assessing the Efficacy of Consumer Boycotts of U.S. Target Firms: A Shareholder Wealth Analysis," Southern Economic Journal, John Wiley & Sons, vol. 86(2), pages 503-529, October.
    6. Ahn, Daniel P. & Ludema, Rodney D., 2020. "The sword and the shield: The economics of targeted sanctions," European Economic Review, Elsevier, vol. 130(C).
    7. Tosun, Onur Kemal & Eshraghi, Arman, 2022. "Corporate decisions in times of war: Evidence from the Russia-Ukraine conflict," Finance Research Letters, Elsevier, vol. 48(C).
    8. Villagra, Nuria & Monfort, Abel & Méndez-Suárez, Mariano, 2021. "Firm value impact of corporate activism: Facebook and the stop hate for profit campaign," Journal of Business Research, Elsevier, vol. 137(C), pages 319-326.
    9. Aretz, Kevin & Bartram, Söhnke M. & Pope, Peter F., 2010. "Macroeconomic risks and characteristic-based factor models," Journal of Banking & Finance, Elsevier, vol. 34(6), pages 1383-1399, June.
    10. Hoffmann, Stefan & Balderjahn, Ingo & Seegebarth, Barbara & Mai, Robert & Peyer, Mathias, 2018. "Under Which Conditions Are Consumers Ready to Boycott or Buycott? The Roles of Hedonism and Simplicity," Ecological Economics, Elsevier, vol. 147(C), pages 167-178.
    11. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
    12. Hufbauer, Gary Clyde & Jung, Euijin, 2020. "What's new in economic sanctions?," European Economic Review, Elsevier, vol. 130(C).
    13. Andrew John & Jill Klein, 2003. "The Boycott Puzzle: Consumer Motivations for Purchase Sacrifice," Management Science, INFORMS, vol. 49(9), pages 1196-1209, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Josiassen, Alexander & Lang, Eva & Nørfelt, Astrid & Kock, Florian & Assaf, A. George, 2024. "Investigating place solidarity and consumer boycotting in threatening times: A study on the Ukraine-Russia conflict," Journal of Business Research, Elsevier, vol. 182(C).
    2. French, Joseph J. & Gurdgiev, Constantin & Shin, Seungho, 2023. "When doing the right thing doesn't pay: Impact of corporate decisions on Russian market participation in the wake of the Ukraine-Russia war," Finance Research Letters, Elsevier, vol. 58(PB).
    3. Monica Martinez-Blasco & Vanessa Serrano & Francesc Prior & Jordi Cuadros, 2023. "Analysis of an event study using the Fama–French five-factor model: teaching approaches including spreadsheets and the R programming language," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-34, December.
    4. Umar, Muhammad & Riaz, Yasir & Yousaf, Imran, 2022. "Impact of Russian-Ukraine war on clean energy, conventional energy, and metal markets: Evidence from event study approach," Resources Policy, Elsevier, vol. 79(C).
    5. Krüger, Tinka & Hoffmann, Stefan & Nibat, Ipek N. & Mai, Robert & Trendel, Olivier & Görg, Holger & Lasarov, Wassili, 2024. "How consumer animosity drives anti-consumption: A multi-country examination of social animosity," Journal of Retailing and Consumer Services, Elsevier, vol. 81(C).
    6. Christos Argyropoulos & Bertrand Candelon & Jean‐Baptiste Hasse & Ekaterini Panopoulou, 2024. "Towards a macroprudential regulatory framework for mutual funds?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3063-3082, July.
    7. Kumari, Vineeta & Hassan, Majdi & Pandey, Dharen Kumar, 2024. "Are high-income and innovative nations resilient to the Russia-Ukraine war?," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1268-1287.
    8. Ghasseminejad, Saeed & Jahan-Parvar, Mohammad R., 2021. "The impact of financial sanctions: The case of Iran," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 601-621.
    9. Martins, António Miguel & Correia, Pedro & Gouveia, Ricardo, 2023. "Russia-Ukraine conflict: The effect on European banks’ stock market returns," Journal of Multinational Financial Management, Elsevier, vol. 67(C).
    10. Shi, Wei & Wei, Jingran, 2023. "In the crossfire: Multinational companies and consumer boycotts," China Economic Review, Elsevier, vol. 77(C).
    11. Isabel Casas & Eva Ferreira & Susan Orbe, 2021. "Time-Varying Coefficient Estimation in SURE Models. Application to Portfolio Management," Journal of Financial Econometrics, Oxford University Press, vol. 19(4), pages 707-745.
    12. Fengze Han & Runliang Li & Sen Ma & Tzu‐Chang Forrest Cheng, 2025. "Deterrent effects of targeted sanctions by mainland China on Taiwan: evidence from 2021–2 sanction events," Economica, London School of Economics and Political Science, vol. 92(365), pages 259-284, January.
    13. Meyer, Klaus E. & Fang, Tony & Panibratov, Andrei Y. & Peng, Mike W. & Gaur, Ajai, 2023. "International business under sanctions," Journal of World Business, Elsevier, vol. 58(2).
    14. Krüger, Tinka & Hoffmann, Stefan & Nibat, Ipek N. & Mai, Robert & Trendel, Olivier & Görg, Holger & Lasarov, Wassili, 2024. "How consumer animosity drives anti-consumption: A multi-country examination of social animosity," Open Access Publications from Kiel Institute for the World Economy 302042, Kiel Institute for the World Economy (IfW Kiel).
    15. 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).
    16. Qiao, Chengzhi, 2024. "Financial risks and economic costs of trade sanctions," Finance Research Letters, Elsevier, vol. 69(PA).
    17. Iglesias, Emma M., 2022. "The influence of extreme events such as Brexit and Covid-19 on equity markets," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 418-430.
    18. Grzegorz Zasuwa, 2019. "The Role of Individual- and Contextual-Level Social Capital in Product Boycotting: A Multilevel Analysis," Sustainability, MDPI, vol. 11(4), pages 1-16, February.
    19. Dang, Quyen Thao & Rammal, Hussain Gulzar & Ghauri, Pervez N. & Jasovska, Pavlina & Velasquez, Santiago, 2024. "‘Caught in the middle’: Effects on and reactions of Vietnamese timber exporters in the context of US-China economic sanctions," Journal of World Business, Elsevier, vol. 59(6).
    20. Michael David Maffie, 2024. "Politicized shopping in the gig economy: Retaliation and solidarity on the “other side” of the app," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(3), pages 343-367, July.

    More about this item

    Keywords

    Divestment; Market adaptation; Geopolitical conflict; Activism;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012923. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.