International relations as a driver of equity investments: Evidence from shareholders’ reaction to geopolitical shocks

IF 6.9 2区经济学 Q1 BUSINESS, FINANCE

Research in International Business and Finance Pub Date : 2025-08-01 DOI:10.1016/j.ribaf.2025.103111

Luca Bellardini , Oliviero Roggi , Kateryna Tkach

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Abstract

This paper explores how international relations influence equity investments, focusing on shareholder reactions to six major geopolitical shocks between 2020 and 2023: namely, the Covid-19 outbreak, the UK-EU Brexit Trade Agreement, the US withdrawal from Afghanistan, the Russian full-scale invasion of Ukraine, the Taiwan Strait crisis, and the Hamas-led attack on Israel. The study examines the changes in investors’ portfolio exposures (PE) in response to these shocks, by adopting the shareholder-level perspective and considering factors such as geopolitical alliances, voting alignment at the United Nations General Assembly, and cross-country differences in the Index of Economic Freedom and the Human Development Index. The results show that bloc-level relations play a significant role in driving PE changes, with foreign investors generally reducing their exposure during shocks. The findings underscore the importance of geopolitical factors in investment decisions, revealing how the perceived strength of alliances and differences in institutional quality can shape investor behaviour.

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国际关系是股票投资的驱动因素：来自股东对地缘政治冲击反应的证据

本文探讨了国际关系如何影响股权投资，重点关注股东对2020年至2023年间六大地缘政治冲击的反应：即新冠肺炎疫情、英国与欧盟脱欧贸易协定、美国从阿富汗撤军、俄罗斯全面入侵乌克兰、台湾海峡危机和哈马斯领导的对以色列的攻击。该研究通过采用股东层面的视角，并考虑地缘政治联盟、联合国大会上的投票结盟、经济自由指数和人类发展指数的跨国差异等因素，考察了投资者投资组合风险敞口（PE）在应对这些冲击时的变化。结果表明，集团层面的关系在推动PE变化中发挥了重要作用，外国投资者在冲击期间普遍减少了他们的敞口。研究结果强调了地缘政治因素在投资决策中的重要性，揭示了联盟的感知实力和机构质量的差异如何影响投资者的行为。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Research in International Business and Finance BUSINESS, FINANCE-

CiteScore

11.20

自引率

9.20%

发文量

240

期刊介绍： Research in International Business and Finance (RIBAF) seeks to consolidate its position as a premier scholarly vehicle of academic finance. The Journal publishes high quality, insightful, well-written papers that explore current and new issues in international finance. Papers that foster dialogue, innovation, and intellectual risk-taking in financial studies; as well as shed light on the interaction between finance and broader societal concerns are particularly appreciated. The Journal welcomes submissions that seek to expand the boundaries of academic finance and otherwise challenge the discipline. Papers studying finance using a variety of methodologies; as well as interdisciplinary studies will be considered for publication. Papers that examine topical issues using extensive international data sets are welcome. Single-country studies can also be considered for publication provided that they develop novel methodological and theoretical approaches or fall within the Journal''s priority themes. It is especially important that single-country studies communicate to the reader why the particular chosen country is especially relevant to the issue being investigated. [...] The scope of topics that are most interesting to RIBAF readers include the following: -Financial markets and institutions -Financial practices and sustainability -The impact of national culture on finance -The impact of formal and informal institutions on finance -Privatizations, public financing, and nonprofit issues in finance -Interdisciplinary financial studies -Finance and international development -International financial crises and regulation -Financialization studies -International financial integration and architecture -Behavioral aspects in finance -Consumer finance -Methodologies and conceptualization issues related to finance