Financial sanctions and global stock market reaction: Evidence from the Russia-Ukraine conflict

Drawing from recent studies on the effect of Russia-Ukraine war on stock markets, this study examines global stock markets' reactions to sanctions at the beginning of the war. Using the event study methodology, this study finds that investors place higher valuation for firms located in countries that sanction Russia, in comparison with stock markets located in countries which did not sanction Russia. In addition, the higher valuation is stronger, if firms are politically connected or located in countries with lower geopolitical risks.