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Lookup NU author(s): Dr Vu TrinhORCiD
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).
Purpose – The purpose of this paper is to study the market reactions of the banking industry to the Russian–Ukraine war. Design/methodology/approach – This paper uses an event study methodology, regression analyses and interaction effects to study the effect of the war on banks stock prices and analyze factors that explain the cumulative abnormal return. Findings – First, this study finds a significant decline of almost 1.5% in return on the war date. Similar patterns were observed for all continents, but Europe had the most severe drop of about 4%. Second, after excluding the contemporaneous influence of the whole market using the market model, global bank equities returns fell by about 1% on the war date, indicating that bank stocks were more severely impacted by the war than the average stock market. Net-of-market return approach further reveals that bank stock prices decreased 1.4% more on the event day compared to the prewar market average. Third, the impacts of the war and sanctions were persistent when the war continued. Banks stocks were most hit in Europe, Asia and North America. Originality/value – This paper pioneers the study of the effect of the Russia–Ukraine war on the banking industry. This paper also analyzes the reaction pattern of bank stocks before, during and after the war to explain the behavior and expectations of investors toward the war.
Author(s): Boubaker S, Nguyen N, Trinh VQ, Vu T
Publication type: Article
Publication status: Published
Journal: Review of Accounting and Finance
Year: 2023
Volume: 22
Issue: 1
Pages: 123-153
Print publication date: 25/01/2023
Online publication date: 19/01/2023
Acceptance date: 21/12/2022
Date deposited: 03/02/2023
ISSN (print): 1475-7702
ISSN (electronic): 1758-7700
Publisher: Emerald Publishing Limited
URL: https://doi.org/10.1108/RAF-10-2022-0294
DOI: 10.1108/RAF-10-2022-0294
ePrints DOI: 10.57711/kvq4-8m74
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