Russia-Ukraine War and the global tourism sector: A 13-day tale

Pandey, Dharen Kumar; Kumar, Rahul

doi:10.1080/13683500.2022.2081789

Cited by 65 publications

(28 citation statements)

References 25 publications

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“…Accordingly, the results are robust to both parametric and non-parametric tests, except for France and United States. Furthermore, the cross-sectional results are robust to heteroskedasticity issues (Austmann and Vigne, 2021; Pandey and Kumar, 2022b; Shehadeh et al. , 2021).…”

Section: Resultsmentioning

confidence: 84%

“…Additionally, we include financial leverage, which is widely discussed in the literature as a driver of stock returns (Jawed et al. , 2021; Opler and Titman, 1994; Pandey and Kumar, 2022a, b). ROA is expected to drive event-induced abnormal returns, thus making it a measure of financial performance (Frankel and Lee, 1998; Pandey and Kumar, 2022a).…”

Section: Methodsmentioning

confidence: 99%

“…Moreover, explanatory variables that are capable of predicting stock returns have not been examined with reference to war and conflict events. Although Pandey and Kumar (2022b) provide firm-level impacts of the war, their findings are limited to the tourism sector. In addition, we establish the association of abnormal returns with geopolitical risk and book-to-market; this has been used more widely in recent literature.…”

Section: Introductionmentioning

confidence: 99%

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What makes firms vulnerable to the Russia–Ukraine crisis?

Abbassi¹,

Kumari²,

Pandey³

2022

JRF

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PurposeThis study examines the impact of the Russia–Ukraine war on the constituent firms of the leading stock market indices of the G7 countries to provide insights into the vulnerability of firms to war events.Design/methodology/approachThis study employs the event study method on a sample of 531 firms covering the period from 02 March 2021 to 08 March 2022 and conducts a cross-sectional analysis of cumulative abnormal returns and country- and firm-specific variables.FindingsRisk exposure and trade dependence trigger invasion-generated negative abnormal returns. The authors demonstrate that stock prices are fragile to geopolitical risks and trade dependence. Consistent with previous literature, the authors find evidence of a size anomaly and high risk associated with a higher book-to-market ratio.Research limitations/implicationsThis study has implications for policymakers identifying the firm-specific variables driving event-induced returns. While providing insights into the geographical diversification of funds, this study shows the heterogeneous characteristics of firms operating in these countries.Originality/valuePrevious studies on the Russia–Ukraine war have been limited to analyzing the behavior of leading stock market indices without examining firm-level variations triggered by the war. This study fills this gap and contributes to the growing literature on the Russia–Ukraine crisis in two ways: first, it provides firm-level evidence from the G7 countries in addition to how global stock market indices have reacted to the invasion and second, it uses cross-sectional analysis to provide evidence of the characteristics that make firms resilient to wars.HighlightsWe are the first to report firm-level evidence of the Russia–Ukraine war effectsFirms in France and the United States are unaffectedStock prices are fragile to geopolitical risks and considerable dependence on tradeHigher book-to-market exposes the firms to the risk of exogenous shocksSmaller firms outperform large firms in the G7 stock markets

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Section: Resultsmentioning

confidence: 84%

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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What makes firms vulnerable to the Russia–Ukraine crisis?

Abbassi¹,

Kumari²,

Pandey³

2022

JRF

Self Cite

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“…Umar et al (2022a) provide the evidence of considerable increase in abnormal returns of renewable energy markets due to Russian-Ukraine conflict. Pandey and Kumar (2022) examine the impact of Russia-Ukraine conflict on the global tourism industry and report that the adverse effect of this conflict on European, Middle East, and African Tourism industries on the event day. Umar et al (2022b) and Wang et al (2022) estimate the connectedness between global financial markets during the Russia-Ukraine conflict and find the strong connectedness during this event compared to before event sample period.…”

Section: Introductionmentioning

confidence: 99%

The Reaction of G20+ Stock Markets to the Russia-Ukraine Conflict ‘Black-Swan’ Event: Evidence From Event Study Approach

2022

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“…Umar et al (2022), Adekoya et al (2022) study the market interconnectedness across countries and assets in this episode. Pandey and Kumar (2022), Sun et al (2022) and Yousaf et al (2022) document the heterogeneous responses in global stock markets. Boubaker et al (2022) find evidence that markets of NATO countries exhibited higher returns.…”

Section: Recent Crises and Financial Marketsmentioning

confidence: 99%

The Russia–Ukraine conflict and foreign stocks on the US market

Clancey-Shang

2023

JRF

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PurposeThe authors investigate how market quality diverges between foreign firms and domestic firms on the US stock market in response to the Russia–Ukraine conflict.Design/methodology/approachWith an event study approach, the authors compare foreign firms with domestic firms in their market responses over the three-day window around the outbreak of the war. Further, with Difference-in-Difference (DID) analyses, the authors study the change in foreign firms' market quality upon this outbreak in comparison with their domestic counterparts. Finally, the authors compare the foreign firms across firm specific characteristics and home country characteristics.FindingsThe authors find that foreign stocks listed in the US experience more severe market quality deterioration compared to the stocks' domestic counterparts. This effect is especially strong for companies from countries considered friendlier towards Russia and companies that are not cross-listed. The authors' findings are consistent with the information asymmetry hypothesis concerning market quality. Moreover, US market investors have more concerns over political risks with non-US-aligned political standings during war times.Research limitations/implicationsThe authors' findings are consistent with the information asymmetry hypothesis concerning market quality. Moreover, US market investors have more concerns over political risks over non-US-aligned political standings during war time.Practical implicationsSince both countries in the conflict are in Europe, the US stock market, to a certain degree, becomes a safe haven for capital from Europe and other countries. In the meantime, American Depository Receipts (ADRs) have been important for US investors to create a globally diversified portfolio, and the knowledge regarding ADRs' vulnerability to international geopolitical events is valuable. The author' results are informative for stock market investors to understand the market dynamics for international and domestic companies during this extremely uncertain time.Originality/valueThis is the first study that examines the market quality divergence between foreign firms and domestic firms on the US stock market in response to the Russia–Ukraine conflict. The authors provide novel evidence on the change in ADRs' market quality associated with significant political uncertainty. The authors show that ADRs' market quality is more vulnerable to international geopolitical risks relative to otherwise comparable domestic firms.

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Russia-Ukraine War and the global tourism sector: A 13-day tale

Cited by 65 publications

References 25 publications

What makes firms vulnerable to the Russia–Ukraine crisis?

What makes firms vulnerable to the Russia–Ukraine crisis?

The Reaction of G20+ Stock Markets to the Russia-Ukraine Conflict ‘Black-Swan’ Event: Evidence From Event Study Approach

The Russia–Ukraine conflict and foreign stocks on the US market

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