Tsoi, Sai Chak (2025) Assessing the Impact of the Israel Palestine 2023 Conflict on the Financial Performance of Companies Listed in the Middle East. Masters thesis, Concordia University.
Preview |
Text (application/pdf)
2MBTsoi_MSc_S2025.pdf - Accepted Version Available under License Spectrum Terms of Access. |
Abstract
This study examines the financial impact of the 2023 armed conflict between Israel and Hamas which is a Palestinian militant group and political organization that governs the Gaza Strip on the stock markets and on specific industries in Israel, Palestine, and Saudi Arabia. We analyze three key dates in 2023: October 7th, when hundreds of Hamas-led gunmen stormed Israel's Gaza perimeter fence and attacked several nearby Israeli communities, leading Israel to declare war and conduct retaliatory airstrikes on Gaza; November 21st, when the state of Israel and the organization of Hamas agreed to a four-day pause in armed hostilities; and December 1st, when the pause in armed hostilities ended, and hostilities resumed. We use event study methodology to assess stock price reactions in the Israeli, Palestinian, and Saudi Arabian stock markets, along with industry-specific effects, and our results show that all three markets experience negative abnormal returns around October 7th. Conversely, we observe positive abnormal returns across all three stock markets on November 21st. Notably, when the conflict resumed on December 1st, the Israeli and Saudi Arabian stock markets exhibited positive abnormal returns. Additionally, our findings reveal that different industries are affected to varying degrees on these three dates. We used cross-sectional regression analyses and found that publicly traded companies with strong profitability and high market valuation were significantly more affected by the armed conflict.
| Divisions: | Concordia University > John Molson School of Business > Finance |
|---|---|
| Item Type: | Thesis (Masters) |
| Authors: | Tsoi, Sai Chak |
| Institution: | Concordia University |
| Degree Name: | M. Sc. |
| Program: | Finance |
| Date: | 28 March 2025 |
| Thesis Supervisor(s): | Walker, Thomas |
| Keywords: | Abnormal Returns, Cross-Sectional Analysis, Event Study, Israeli Stock Market (TASE), Palestinian Stock Market (PEX), Saudi Arabian Stock Market (TASI), War Finance |
| ID Code: | 995277 |
| Deposited By: | Sai Chak Tsoi |
| Deposited On: | 17 Jun 2025 17:44 |
| Last Modified: | 17 Jun 2025 17:44 |
| Additional Information: | N/A |
References:
Ahmed, S., Hasan, M. M., & Kamal, M. R. (2023). Russia–Ukraine crisis: The effects on the European stock market. European Financial Management, 29(4), 1078-1118.All Israel News. (2024, October 28). Israeli stock market increased by 28% in 2024. All Israel News. https://allisrael.com/israeli-stock-market-increased-by-28-in-2024
Assaf, R., Gupta, D., & Kumar, R. (2023). The price of war: Effect of the Russia-Ukraine war on the global financial market. Journal of Economic Asymmetries, 28, e00328.
BBC News. (2018, May 16). Israel-Gaza violence: The conflict explained. BBC News. https://www.bbc.com/news/newsbeat-44124396
Boungou, W., & Yatié, A. (2022). The impact of the Ukraine–Russia war on world stock market returns. Economics letters, 215, 110516.
Bradford, B.M. and David Robison, H. (1997), Abnormal returns, risk, and financial statement data: the case of the Iraqi invasion of Kuwait. Journal of Economics and Business, Vol. 49 No. 2, pp. 193-204, doi: 10.1016/s0148-6195(97)81515-9.
Campbell, C. J., Cowan, A. R., & Salotti, V. (2010). Multi-country event-study methods. Journal of Banking & Finance, 34(12), 3078-3090.
Choudhry, T. (2010). World War II events and the Dow Jones industrial index. Journal of Banking & Finance, 34(5), 1022-1031.
Chowdhury, E. K., & Khan, I. I. (2024). Reactions of global stock markets to the Russia–Ukraine war: An empirical evidence. Asia-Pacific Financial Markets, 31(3), 755-778.
Eldor, R. R., Hauser, S., Kroll, Y., & Shoukair, S. (2012). Financial markets and terrorism: The perspective of the two sides of the conflict. Journal of Business Administration Research, 1, 18-29.
Izzeldin, M., Muradoğlu, Y. G., Pappas, V., Petropoulou, A., & Sivaprasad, S. (2023). The impact of the Russian-Ukrainian war on global financial markets. International Review of Financial Analysis, 87, 102598.
Khudaykulova, M., Yuanqiong, H., & Khudaykulov, A. (2022). Economic consequences and implications of the Ukraine-russia war. International Journal of Management Science and Business Administration, 8(4), 44-52.
Kumari, V., Kumar, G., & Pandey, D. K. (2023). Are the European Union stock markets vulnerable to the Russia–Ukraine war? Journal of Behavioral and Experimental Finance, 37, 100793.
Kiddle. (n.d.). 2023 Israel–Hamas war. Kiddle Encyclopedia. https://kids.kiddle.co/2023_Israel%E2%80%93Hamas_war
Lee, J. W. (2001). The impact of the Korean War on the Korean economy. International Journal of Korean Studies, 5(1).
Liargovas, Panagiotis, and Spyridon Repousis. "The impact of mergers and acquisitions on the performance of the Greek banking sector: An event study approach." International Journal of Economics and Finance 3.2 (2011): 89-100.
Lo, G. D., Marcelin, I., Bassène, T., & Sène, B. (2022). The Russo-Ukrainian war and financial markets: the role of dependence on Russian commodities. Finance Research Letters, 50, 103194.
Martins, A. M. (2024). Global equity, commodities and bond market response to Israel-Hamas war. Finance Research Letters, 67, 105900.
Martins, A. M., Correia, P., & Gouveia, R. (2023). Russia-Ukraine conflict: The effect on European banks’ stock market returns. Journal of Multinational Financial Management, 67, 100786.
Rigobon, R., & Sack, B. (2005). The effects of war risk on US financial markets. Journal of banking & finance, 29(7), 1769-1789.
The Hindu. (2024, January 23). One year into the Israel-Hamas war: A timeline of the major events since October 7. Retrieved from https://www.thehindu.com/news/international/one-year-into-the-israel-hamas-war-a-timeline-of-the-major-events-since-october-7/article68728192.ece
Times of Israel. (2023, October 7). “We are at war,” Netanyahu says after Hamas launches devastating surprise attack. https://www.timesofisrael.com/we-are-at-war-netanyahu-says-after-hamas-launches-devastating-surprise-attack/
Repository Staff Only: item control page
Download Statistics
Download Statistics