Posted on January 20, 2026 by Wendy Frost
Companies plan and prepare for numerous contingencies such as natural disasters, economic downturns or even cyberattacks. But responding to a declaration of war is not often on that list.
Larisa Kovalenko
Wanting to help managers address this issue, Larisa Kovalenko, assistant professor of marketing in the Carlos Alvarez College of Business, researched this topic at the onset of the Russian/Ukraine conflict.
Her findings are forthcoming in her Journal of Marketing paper, “Investors Reactions to Firms’ Announcements of Operational Decisions in Markets Involved in Geopolitical Conflicts.”
“At the start of the conflict, companies doing business in Russia were really confused,” said Kovalenko. “The whole world was watching them, and managers of public firms were challenged with reacting to public sentiment to isolate Russia, while also doing what was best for their companies. Their responses had both financial and reputational implications.”
Using Russia’s war with Ukraine as context, she analyzed 289 announcements made by 237 publicly-traded firms with operations in Russia during the first month of the conflict. Kovalenko found that firms had three different types of responses: do nothing, scale down operations or exit immediately.
“It was also a very personal subject for me,” said Kovalenko, who previously taught at Boston College. “I grew up in Russia, and my father was born in Ukraine. This paper was my way of giving back during this time.”
Along with her co-authors, her research provides decision-makers with evidence-based strategies to navigate how to minimize risk during a geopolitical conflict.
“We found that suspension announcements triggered a negative short-term stock market reaction,” she said. “But this reaction was attenuated in situations where competitors suspended operations first; when public interest was highest; if firms had a larger operational footprint in the conflict region; and if they received greater pre-conflict media attention.”
By focusing on investor responses, the framework can help firms better time and communicate these operational decisions. And, the work is applicable to other scenarios that would require market exits in times of crisis.
“Investors are worried about immediate returns, but when events are complex, investors need time to process that information,” said Kovalenko, whose work focuses on the interface of marketing and finance. “In the long term, companies that exited or scaled-down their operations experienced positive abnormal returns three months after the initial loss.”
Kovalenko’s research interests lie in brand management and brand valuation, including managerial responses to negative events affecting brands. Her current research projects include exploring meme stocks as well as implications to brands if they pursue legal action related to trademark infringement.
“Ultimately it was rewarding to show that if companies do the right thing, they’ll benefit in the long run,” she said. “And, in the process, the reputational equity they build translates not only in stronger brands, but also into measurable gains in firm value.”
— Wendy Frost
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