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What do border disputes cost? Evidence from an emerging market

Vineeta Kumari (P. G. Department of Commerce, Magadh University, Bodh Gaya, India)
Dharen Kumar Pandey (P. G. Department of Commerce, Magadh University, Bodh Gaya, India)
Satish Kumar (Department of Management Studies, Malaviya National Institute of Technology Jaipur, Jaipur, India)
Emma Xu (Anderson School of Management, University of New Mexico, Albuquerque, New Mexico, USA)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 9 December 2022




The study aims to examine the impact of six events related to the escalating Indo-China border conflicts in 2020 on the Indian stock market, including the role of firm-specific variables.


This study employs an event-study method on a sample of 481 firms from August 23, 2019 to March 3, 2022. A cross-sectional regression is employed to examine the association between event-led abnormal returns and firm characteristics.


The results show that, although the individual events reflect heterogeneous effects on stock market returns, the average impact of the event categories is negative. The study also found that net working capital, current ratio, financial leverage and operating cash flows are significant financial performance indicators and drive cumulative abnormal returns. Further, size anomaly is absent, indicating that more prominent firms are resilient to new information.

Research limitations/implications

The ongoing conflict between Russia and Ukraine is an example of how these disagreements can devolve into a disaster for the parties to the war. Although wars have an impact on markets at the global level, the impacts of border disputes are local. Border disputes are ongoing, and the study's findings can be used to empower investors to make risk-averting decisions that make their portfolios resilient to such events.


This study provides firm-level insight into the impacts of border conflicts on stock markets. The authors compare the magnitude of such impacts on two types of events, namely injuries and casualties due to country-specific border tensions and a government ban on Chinese apps. Key implications for policymakers, stakeholders and academics are presented.



Kumari, V., Pandey, D.K., Kumar, S. and Xu, E. (2022), "What do border disputes cost? Evidence from an emerging market", International Journal of Emerging Markets, Vol. ahead-of-print No. ahead-of-print.



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