Research Insight | Corporate Response to the War in Ukraine and Its Impact on Consumer Mindset
When geopolitical conflicts arise, how do firms’ decisions to withdraw from (or stay in) a market affect consumer perceptions? This study finds that consumers tended to react positively when firms withdrew from the Russian market in response to the war in Ukraine, challenging prior studies that suggested negative outcomes from corporate sociopolitical activism.
Firms with strong environmental, social, and governance (ESG) reputations see a more positive response than other firms. Thus, a strong ESG reputation bolsters a firm’s standing in crisis situations and differentiates it from competitors.
Timing and manner of withdrawal also matter: Aligning with early actions by industry peers can reduce backlash and foster understanding. Strategic communications should frame the decision as aligned with the firm’s core values and with industry peers. Managers also need to consider broader effects such as long-term financial impacts. Firms should balance short-term gains in consumer mindset against long-term business sustainability and ethical alignment.
Marketers and managers can leverage these insights to navigate geopolitical conflicts by making informed withdrawal or staying decisions that not only align with their company’s ESG stance but also positively influence consumer perceptions.
For more Research Insights, click here.
What You Need to Know
- Withdrawing from (or staying in) a market during geopolitical conflict affects consumers’ brand perceptions, consideration set inclusion, and purchase intent.
- Firms with strong ESG reputations should align their sociopolitical actions with their established ESG commitments to reinforce their ethical stance and enhance consumer perceptions.
- Firms with weak ESG reputations must communicate their decisions carefully to avoid perceptions of insincerity or opportunism.
- Firms should carefully monitor the actions of industry peers to avoid potential backlash against such decisions.
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.
Shankar Ganesan and Girish Mallapragada (2025), “Navigating Geopolitical Turmoil: Corporate Responses to the War in Ukraine and Its Impact on Consumer Mindset,” Journal of Public Policy & Marketing, 44 (1), 122–39. doi:10.1177/07439156241244738