Navigating Geopolitical Turmoil: Corporate Responses to the War in Ukraine and Its Impact on Consumer Mindset

Abstract

Following Russia's 2022 invasion of Ukraine, many companies withdrew from or altered their Russian operations. This research explores the impact of such corporate actions on three important consumer mindset metrics: net brand buzz, consideration set inclusion, and purchase intent. The authors also examine the moderating role of the firm's environmental, social, and governance (ESG) reputation, the type of business (B2B vs. B2C), and the focal firm's decisions relative to peers. The authors test their propositions using a unique data set that combines a firm's decision related to its Russian operations, consumer mindset metrics, and ESG performance after controlling for firm-level factors. The findings indicate that decisions such as withdrawal from or suspension of activities in Russia are positively related to consumer mindset metrics. Moreover, this effect is accentuated for firms with a strong prior ESG reputation such that they experience a greater level of net brand buzz, brand consideration set inclusion, and purchase intent following the decision compared with the period before such decisions. This study contributes to understanding the relationship between such corporate actions and consumer mindset metrics in a novel geopolitical context, providing valuable insights for managerial decision making and public policy.