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Speaker: Kam-Ming WAN Date and Location – Tuesday October 18th 2022 from 14:00 to 15:3<\/strong>0 in Paris and on Zoom<\/strong><\/p>\n —————————————–<\/p>\n
\n<\/strong>Hanken School of Economics
\nCo-authors: Siu Kai CHOY – King’s College London and Tat-Kei LAI – I\u00c9SEG<\/em><\/p>\nABSTRACT<\/h2>\n
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Russia invaded Ukraine on February 24, 2022 and prompted many companies to decouple from the Russian market. This paper uses this event to empirically examine how a firm\u2019s environmental, social, and governance (ESG) rating (as a proxy for goodwill capital) and whether it has a major business relationship in Russia (as a proxy for relationship-specific capital) affect the likelihood and cost of corporate decoupling. We find that firms with a higher ESG rating are more likely to decouple from Russia and incur a smaller cost when they do decouple; the results are stronger for firms with a major business relationship in Russia. Overall, our results are more consistent with the goodwill capital view of ESG than the consumption of private benefit view.<\/p>\n