Document Type
Honors Thesis
Major
Finance & Marketing
Advisor(s)
Sebastian Lobe
Committee Members
Stefano Tijerina, Thomas Wiesen
Graduation Year
May 2023
Publication Date
2025
Abstract
This event study investigates investor expectations during significant multinational divestments. It will specifically analyze the stock market’s reaction to 604 announcements of Russian divestment amongst several multinational corporations listed on the Yale School of Management database in 2022 (Yale CELI List). The goal of this study is to determine how the degree of the divestment announcement from Russia impacts shareholder returns. Based on the database’s divestment levels, we find that multinational corporations that end future investments in Russia but continue existing business outperform all other corporations with different degrees of divestments. While shorter event windows two days before and after the divestment announcement result in negative cumulative average abnormal returns across all divestment grades, longer event windows show positive abnormal returns for some divestment grades. In a separate cross-sectional regression analysis, additional examined variables, namely the GICS industry group, the price to book ratio and the geographical proximity to Ukraine influence the stock market’s reaction after the divestment announcement. We conclude that firms partially divesting current operations experience the lowest abnormal returns and firms that either withdraw from Russia entirely, or only forgo future business plans in Russia experience the highest abnormal returns.
Recommended Citation
Michaud, Aidan, "Stock Market Reaction to Multinational Divestments in Russia" (2025). Honors College. 981.
https://digitalcommons.library.umaine.edu/honors/981