{"title":"Firm Reaction to Geopolitical Crises: Evidence from the Russia‐Ukraine Conflict","authors":"Md Asif Ul Alam, Erik Devos, Zifeng Feng","doi":"10.1111/jfir.12354","DOIUrl":null,"url":null,"abstract":"Abstract This paper investigates corporate announcements related to the Russia‐Ukraine conflict of S&P 500 firms. We observe that firms withdrawing from Russia or suspending operations possess higher cash levels. Additionally, firms with more cash seem to announce withdrawals or suspensions more promptly. These findings suggest that cash levels are pivotal in how firms respond to geopolitical events. While cash does not seem influential when firms announce donations due to the conflict, it does affect the speed of such announcements. Social media also appears to play a significant role. Examining investor reactions to donation or withdrawal/suspension announcements, we report negative returns surrounding these announcements. Our paper underscores the critical role of cash reserves (i.e., financial flexibility) in shaping firm reactions to geopolitical events. This article is protected by copyright. All rights reserved.","PeriodicalId":47584,"journal":{"name":"Journal of Financial Research","volume":"28 4","pages":"0"},"PeriodicalIF":1.5000,"publicationDate":"2023-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Financial Research","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1111/jfir.12354","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Abstract This paper investigates corporate announcements related to the Russia‐Ukraine conflict of S&P 500 firms. We observe that firms withdrawing from Russia or suspending operations possess higher cash levels. Additionally, firms with more cash seem to announce withdrawals or suspensions more promptly. These findings suggest that cash levels are pivotal in how firms respond to geopolitical events. While cash does not seem influential when firms announce donations due to the conflict, it does affect the speed of such announcements. Social media also appears to play a significant role. Examining investor reactions to donation or withdrawal/suspension announcements, we report negative returns surrounding these announcements. Our paper underscores the critical role of cash reserves (i.e., financial flexibility) in shaping firm reactions to geopolitical events. This article is protected by copyright. All rights reserved.
期刊介绍：
The Journal of Financial Research(JFR) is a quarterly academic journal sponsored by the Southern Finance Association (SFA) and the Southwestern Finance Association (SWFA). It has been continuously published since 1978 and focuses on the publication of original scholarly research in various areas of finance such as investment and portfolio management, capital markets and institutions, corporate finance, corporate governance, and capital investment. The JFR, also known as the Journal of Financial Research, provides a platform for researchers to contribute to the advancement of knowledge in the field of finance.
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