Study of the Reaction of Stock Markets to the Cancel Culture Phenomenon in Relation to Russia
Abstract
Suspension of business in Russia by most foreign corporations after the events of 24 February 2022 led to the fact that the social phenomenon of “cancel culture” is now also considered within the framework of global economy and finance. In recent years, the IT industry is appraised as one of the fastest-growing, and the study of its reaction to global events is highly relevant. Using the Event Study method, this study proves that there is no significant impact of the declaration of the Russia-Ukraine conflict on US stock market dynamics of IT companies with branches in Russia. The analysis of individual cases from the sample of companies shows that the companies’ decision to suspend or continue business in Russia depended only on the presence of a significant share of revenues in Russia, the degree of reputational and sanctions risks, and the specifics of corporate ESG policies. The model is limited by the sample and period of analysis. In order to verify model reliability, we applied the t-test that determined the significance of the results. The research is of practical relevance because internationally operating companies may use its data to evaluate risks and make strategic decisions.
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