This paper investigates how firms' international linkages to Russia and Ukraine affected investors' expectations following the escalation of the Russian-Ukrainian war. For this, we perform an event study around the Russian invasion of Ukraine on February 24, 2022, finding that firms with significant trade activity with Russia experienced a substantial reduction in cumulative returns. The effect on cumulative returns is especially pronounced for firms that are dependent on Russian commodities. The impact on the aggregate stock market performance of third countries was on average 0.8 percentage points. The highest losses were borne by European countries.

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Marcus Biermann and Elsa Leromain

26 January 2023     Paper Number CEPDP1899

Download PDF - The indirect effect of the Russian-Ukrainian war through international linkages: early evidence from the stock market

This CEP discussion paper is published under the centre's Trade programme.