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CSR disclosure, political risk and market quality: Evidence from the Russia-Ukraine conflict

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  • Clancey-Shang, Danjue
  • Fu, Chengbo

Abstract

In this study, we investigate the divergence in market quality between high-ESG (Environmental, Social, and Governance) and low-ESG firms in response to the Russia-Ukraine conflict. With an event-study approach, we find that better CSR (Corporate Social Responsibility) performance alleviates the market quality deterioration following the outbreak of the war for US-listed foreign firms. Such an effect is insignificant for US domestic firms. We also find that foreign firms experience more pronounced market quality deterioration compared to their US counterparts. Our findings align with the resiliency hypothesis regarding the link between CSR and financial performance, supporting that better CSR performance is associated with improved information transparency.

Suggested Citation

  • Clancey-Shang, Danjue & Fu, Chengbo, 2024. "CSR disclosure, political risk and market quality: Evidence from the Russia-Ukraine conflict," Global Finance Journal, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:glofin:v:60:y:2024:i:c:s1044028324000103
    DOI: 10.1016/j.gfj.2024.100938
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    More about this item

    Keywords

    ESG; Information environment; Market quality; American depository receipt; Russia-Ukraine conflict;
    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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