The Impact of Russia-Ukraine Conflict on Chinese Military Industry Sector -Based on Event Study
DOI:
https://doi.org/10.54691/bcpbm.v26i.1986Keywords:
Russia; Ukraine; Conflict; Chinese military industry sector; Event study.Abstract
The conflict between Russia and Ukraine has had a tremendous impact on the world economy. This paper uses the event study and selects 51 military enterprises in Shanghai and Shenzhen from February 14 to March 4, 2022. The date of the event was set as February 15, and within eight days of the event, the CAAR as a whole was positive. So, the Russia-Ukraine conflict on the Chinese military industry sector had a positive impact, but the impact of the shorter duration, was mainly affected by investor sentiment, and the overall performance of hedging demand. In the long run, the military industry sector will still be driven by fundamentals. Investors need to include the Chinese military industry sector in their portfolios to avoid the risk of geopolitical conflict. It is also important to note that due to the relatively short duration of events, the portfolio needs to be dynamically adjusted and the risk of late price declines cannot be ignored.
Downloads
References
Liao Q. How will the Russia-Ukraine conflict affect the world economy? [N]. Liberation Daily, 2022-03-07(007). (in Chinese)
Zheng S. Enterprise financial management under emergency [J]. Accounting Learning, 2020(23): 44-45. (in Chinese)
Verma R. K., Kumar A., Bansal R. Impact of COVID-19 on different sectors of the economy using event study method: An Indian perspective [J]. Journal of Asia-Pacific Business, 2021, 22(2), 109-120.
Narayan P. K., Gong Q., Ahmed H. J. A. Is there a pattern in how COVID-19 has affected Australia’s stock returns? [J]. Applied Economics Letters, 2022, 29(3), 1-4.
Liu K. The effects of COVID-19 on Chinese stock markets: An EGARCH approach [J]. Economic and Political Studies, 2021, 9(2), 148-165.
Xu H, Pu H. The Impact of COVID-19 on China’s stock market —Based on event study [J]. Finance Forum, 2021, 26 (07): 70-80. (in Chinese)
Maillet, B. B., Michel, T. L. The Impact of the 9/11 events on the American and French stock markets [J]. Review of International Economics, 2005, 13 (3), 597-611.
Feria-Domínguez, J., Paneque, P., Gil-Hurtado, M. Risk perceptions on hurricanes: Evidence from the U.S. stock market [J]. International Journal of Environmental Research and Public Health, 2017, 14 (6), 600.
Wang Y. A conflict between Russia and Ukraine that could fuel global inflation has limited medium-term impact on stocks [N]. Shanghai Securities News, 2022-02-28(005). (in Chinese)
Fama E. F., Fisher L., Jensen M. C., R. The adjustment of stock prices to new information[J]. International Economic Review,1969,10(1), 1.
Wang L, Zhu Z. Research innovation and application progress of event study[J]. Social Sciences Abroad, 2012(01): 138-144. (in Chinese)
Ullah S., Zaefarian G., Ahmed R., Kimani D. How to apply the event study methodology in STATA: An overview and a step-by-step guide for authors [J]. Industrial Marketing Management, 2021 (prepublish).
Caves R. E. Mergers, takeovers, and economic efficiency: Foresight vs. hindsight [J]. International Journal of Industrial Organization,1989,7(1), 151-174
Kaplanski, G., Levy, H. Sentiment and stock prices: The case of aviation disasters [J]. Journal of Financial Economics, 2009, 95(2), 174-201.
Liu X. U.S. Secretary of State Blinken announced the closure of the U.S. embassy in Ukraine and called on U.S. citizens in Ukraine to leave the country as soon as possible [N]. CCTV News, February 15, 2022. (in Chinese)
On February 24, Putin ordered an attack on Ukraine, the Chinese embassy in Ukraine reminded: to travel with the national flag [N]. Tencent News, February 24, 2022. (in Chinese)
Downloads
Published
Issue
Section
How to Cite
