Finance research letters

• Impact of the Russian invasion of Ukraine on global stock market indices. • Developed markets more heavily and negatively impacted than emerging markets. • Exceptionally, US markets positively impacted by the war on the event day. • War has not affected Asian markets. • Trade-to-GDP negatively associated with abnormal returns during the war. Using an event study methodology to examine the impact of the 2022 Russian invasion of Ukraine, we find that this invasion generated negative cumulative abnormal returns for global stock market indices, but with heterogeneous effects. Cross-sectional analysis reveals that economic globalization as measured by GDP-scaled trade is negatively associated with event-day and post-event returns. Consistent with the expected economic stimulus of military preparedness, markets of NATO countries exhibited higher returns. Results are consistent with markets of more globalized economies being more vulnerable to international conflicts, with, however, notable heterogeneities.

Heterogeneous impacts of wars on global equity markets: Evidence from the invasion of Ukraine