The Russia-Ukraine war is a hybrid war that started in 2014 and escalated in 2022 due to territorial disputes and political conflicts between the two countries. This war has serious implications for the global economy, especially the stock market. To explain, our results highlight a negative and significant effect of the armed conflict between Ukraine and Russia on world stock returns [1]. Western countries impose sanctions on Russia, prohibiting Russia from exporting their natural resources like natural gas and crude oil. This essay argues that the Russia-Ukraine war has a significant and negative impact on the U.S. stock market, and this impact varies depending on the environmental performance of the companies. In the essay, we take the returns of prices of crude oil as the independent variable and the Dow Jones Industrial Average as the dependent variable. We found a remarkable correlation between the prices of crude oil and the Dow Jones index. The essay also classifies all the companies in the Dow Jones Industrial Average into two categories based on their Environmental, Social, and Governance (ESG) level: green (environmentally friendly) and brown (not environmentally friendly). And find their correlation with the price of crude oil. The result shows that the companies that are classy as green are not affected by the crude oil price fluctuation. The essay concludes the impact of the Russia-Ukraine war on the U.S. stock market and gives recommendations to both economists and investors for encountering any situation similar to the Russia-Ukraine war. The essay also gives advice about the direction for industrial companies to develop.
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Ge et al. (2024) studied this question.
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