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Stock market reaction to the military conflict between Russia and Ukraine: an event study for the European tourism and hospitality industry

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  • António Miguel Martins
  • Pedro Correia
  • Susana Cró

Abstract

This paper examines the short-term market reaction of European tourism and hospitality industry to the beginning of the military conflict between Russia and Ukraine (24 February 2022). Using an event study, for a sample of 165 listed firms, we observe a negative and statistically significant stock price reaction at and around the beginning of the military conflict between Russia and Ukraine. These results are consistent with investor sentiment hypothesis and asset-pricing perspective. These reactions are reinforced or mitigated by firm-specific characteristics such as liquidity, size, profitability, and institutional ownership. Finally, we find that listed firms located in: (i) countries in which Russia and Ukraine are the largest source of inbound foreign tourists, and (ii) countries formerly occupied by the Soviet Union and/or that share a common border with Russia, tend to show more negative abnormal returns.

Suggested Citation

  • António Miguel Martins & Pedro Correia & Susana Cró, 2023. "Stock market reaction to the military conflict between Russia and Ukraine: an event study for the European tourism and hospitality industry," Journal of Applied Economics, Taylor & Francis Journals, vol. 26(1), pages 2261756-226, December.
    • Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2261756
    DOI: 10.1080/15140326.2023.2261756
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