Kyiv School of Economics invites to attend an academic seminar "
Conflict returns: evidence from the US defense industry" by
Olha Zadorozhna, Kozminski University. The seminar will be held in English online via Zoom. To get a link please register below.
Date&Time: Thursday, December 17, 17:00 (Kyiv time).
About the speaker. Olha Zadorozhna is an Assistant Professor at Department of Economic Empirical Analysis at Kozminski University and KSE graduate. She obtained her Ph.D. from Bocconi University in Italy and specializes in financial and political economics. Dr. Zadorozhna has been working on the topic of the land market in Ukraine for over eight years. Additionally, she is involved in several research projects analyzing the impact of political decisions on financial markets, as well as a project analyzing the scale and effects of suburbanization in Poland.
Abstract. The study analyzes how US defense sector stocks react to military conflict announcements. Both official announcements and media announcements (media coverage) of the onset of conflicts are considered. The study utilizes 107 conflicts during the period 1980-2019. The individual rates of return of the 16 largest US defense companies are examined using event study methodology and a panel dummy regression approach. Content analysis is applied to identify the dates of conflicts before their official start. The results confirm the significant impact of the onset of conflicts on companies’ returns. It is especially true for conflicts with broad media coverage. The results suggest that there is a strong and significant reaction of returns on the dates when media coverage of conflicts is more intense. The distance between the US and the country involved in the conflict also appears to be significant, while the GDP of the latter is not. Investors in US defense companies tend to react more to European conflicts than to conflicts located elsewhere in the world. In contrast to previous research, internal conflicts affect companies’ returns more than international ones.
This seminar is enabled by the financial support from Sweden. 