Abstract

Paper Authors: Om Kanchanasakdichai, Jūra Liaukonytė, and Alminas Žaldokas

Consumers often express ethical concerns during geopolitical crises, yet sustained shifts in

purchasing are rare. After Russia’s 2022 invasion of Ukraine, however, hundreds of multinationals

announced costly withdrawals. We examine how firms form and act on expectations of

consumer and investor pressure, focusing on the credibility of corporate commitments under

geopolitical shocks. Linking firm-level withdrawal records to Advan/SafeGraph mobility and

spending data, we map the political composition of U.S. consumer bases. Consumer spending

shows no systematic decline for firms that delay announcements, consistent with the limited impact of boycotts. By contrast, firms with more Democrat-leaning and less politically dispersed

customers announce earlier, and those with Democrat-leaning bases are significantly more likely

to complete exits. Investors amplify these dynamics by penalizing reversals and pricing visible

exposures, making corporate speech consequential even when demand responses are muted.

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