Global evidence on the Russia–Ukraine conflict and energy stock returns

Journal article


Kakhkharov, Jakhongir, Onur, Ilke, Yalcin, Erkan and Zhu, Rong. (2024). Global evidence on the Russia–Ukraine conflict and energy stock returns. International Review of Economics and Finance. 93, pp. 413-435. https://doi.org/10.1016/j.iref.2024.03.063
AuthorsKakhkharov, Jakhongir, Onur, Ilke, Yalcin, Erkan and Zhu, Rong
Abstract

Using the event-study and difference-in-differences approaches, this paper examines the impact of the Russia–Ukraine conflict on the stock returns of alternative energy and oil & gas producers from 48 countries. We focus on multiple critical events from the beginning of the invasion through eight months into the conflict. Our empirical results indicate that renewable energy and oil & gas producers performed better than the general stock market. Oil & gas producers generated greater returns when compared with alternative energy firms, especially at the beginning of the conflict. The gap in stock returns between the two groups of energy producers shrank significantly as the conflict progressed. Particularly in Europe, later stages of the conflict witnessed greater alternative energy stock returns than oil & gas ones. A further examination of the index returns for the segment of well-established energy firms reveals that renewable indices performed better then oil & gas indices in every critical phase of the conflict. Finally, we show that the stock returns of renewable energy equipment manufacturers also exceeded those of oil & gas equipment producers during the crisis. Overall, our results indicate investors’ optimism about the prospect of green energy following the Russian invasion of Ukraine.

KeywordsRussia–Ukraine conflict ; Alternative energy ; Oil & gas ; Stock returns
Year01 Jan 2024
JournalInternational Review of Economics and Finance
Journal citation93, pp. 413-435
PublisherElsevier Science BV
ISSN1059-0560
Digital Object Identifier (DOI)https://doi.org/10.1016/j.iref.2024.03.063
Web address (URL)https://www.sciencedirect.com/science/article/pii/S1059056024002284?via%3Dihub
Open accessPublished as ‘gold’ (paid) open access
Research or scholarlyResearch
Page range413-435
Publisher's version
License
File Access Level
Open
Output statusPublished
Publication dates
Online03 May 2024
Publication process dates
Accepted25 Mar 2024
Deposited20 Jun 2024
Additional information

© 2024 The Authors. Published by Elsevier Inc.

This is an open access article under the CC BY license
(http://creativecommons.org/licenses/by/4.0/).

Place of publicationNetherlands
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