Winners of War: The effect of the Russo-Ukrainian war on European defense firms' stock prices
(2025) NEKH01 20242Department of Economics
- Abstract (Swedish)
- This thesis studies the impact of the war in Ukraine on stock prices of firms within the European defense industry. While previous studies have examined the effects of war on stock prices of defense firms, fewer studies specifically focus on the war in Ukraine. Furthermore, this thesis focuses solely on European defense firms, offering a new geographical perspective to the topic. Additionally, the thesis brings more of a long-term perspective to a subject where studying short term effects has been most common. Two separate methodologies are adopted, first a difference-in-difference model is applied, followed by an event study approach. The combination of using both models allows for analysis of both short-term immediate impacts as well as... (More)
- This thesis studies the impact of the war in Ukraine on stock prices of firms within the European defense industry. While previous studies have examined the effects of war on stock prices of defense firms, fewer studies specifically focus on the war in Ukraine. Furthermore, this thesis focuses solely on European defense firms, offering a new geographical perspective to the topic. Additionally, the thesis brings more of a long-term perspective to a subject where studying short term effects has been most common. Two separate methodologies are adopted, first a difference-in-difference model is applied, followed by an event study approach. The combination of using both models allows for analysis of both short-term immediate impacts as well as more long-term effects. Results show stock prices of defense firms on the European markets reacting positively to the start of the Russian invasion of Ukraine. From a long-term perspective European defense stocks have also performed strongly over the whole course of the war up until the last observations included in this study. Results are mostly in line with previous research suggesting positive stock price reactions from defense firms in relation to wars. The thesis contributes to a foundation of knowledge of how wars and geopolitical events affect financial markets and in particular the defense industry contributing to a basis on which policymakers, investors and risk managers can make informed decisions in future times of war or similar events. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9183848
- author
- Olsson, Hjalmar LU
- supervisor
- organization
- course
- NEKH01 20242
- year
- 2025
- type
- M2 - Bachelor Degree
- subject
- language
- English
- id
- 9183848
- date added to LUP
- 2025-05-08 09:16:08
- date last changed
- 2025-05-08 09:16:08
@misc{9183848,
abstract = {{This thesis studies the impact of the war in Ukraine on stock prices of firms within the European defense industry. While previous studies have examined the effects of war on stock prices of defense firms, fewer studies specifically focus on the war in Ukraine. Furthermore, this thesis focuses solely on European defense firms, offering a new geographical perspective to the topic. Additionally, the thesis brings more of a long-term perspective to a subject where studying short term effects has been most common. Two separate methodologies are adopted, first a difference-in-difference model is applied, followed by an event study approach. The combination of using both models allows for analysis of both short-term immediate impacts as well as more long-term effects. Results show stock prices of defense firms on the European markets reacting positively to the start of the Russian invasion of Ukraine. From a long-term perspective European defense stocks have also performed strongly over the whole course of the war up until the last observations included in this study. Results are mostly in line with previous research suggesting positive stock price reactions from defense firms in relation to wars. The thesis contributes to a foundation of knowledge of how wars and geopolitical events affect financial markets and in particular the defense industry contributing to a basis on which policymakers, investors and risk managers can make informed decisions in future times of war or similar events.}},
author = {{Olsson, Hjalmar}},
language = {{eng}},
note = {{Student Paper}},
title = {{Winners of War: The effect of the Russo-Ukrainian war on European defense firms' stock prices}},
year = {{2025}},
}