Analyzing the Effect of Public Sentiment Towards Economic Sanctions News during Russia-Ukraine Conflict on Blockchain Market and Fintech Industry

43 Pages Posted: 16 Feb 2023 Last revised: 30 Sep 2023

See all articles by Emmanuel Joel Aikins Abakah

Emmanuel Joel Aikins Abakah

University of Ghana - University of Ghana Business School (UGBS)

David Adeabah

Curtin University; University of Ghana - University of Ghana Business School (UGBS)

Aviral Kumar Tiwari

Indian Institute of Management Bodh Gaya

Mohammad Abdullah

Universiti Sultan Zainal Abidin (UniSZA)

Date Written: October 14, 2022

Abstract

This paper uses a new approach to estimate public sentiments during the outbreak of Russia-Ukraine conflict and their consequences for the global financial technology industry and blockchain markets. We develop a Russia-Ukraine War Economic Sanctions News Sentiment Index (RUWESsent) to reflect the public sentiment and reaction to economic sanction news using media coverage, panic, sentiment and media hype based on Twitter sentiments, Google Trend, Wikipedia Trend, and News Sentiments. We use the quantile-on-quantile regression, rolling window wavelet correlation, quantile VAR and the time-frequency quantile VAR approach as estimation techniques. Our findings reveal the total and net connectedness for the new index, entitled RUWESsent in different quantiles in the short and long term. This index sheds insights into blockchain-based assets and fintech stocks that receive or send sentiment shocks. The network connectedness results show that the fintech industry is the primary recipient of the sentimental shocks transmitted to the system during the period across all frequencies. Additional result demonstrates that positive RUWESsent have positively affected FinTech and blockchain market stock returns in a bullish market and a negative impact on a bearish market. We again find a higher negative correlation immediately after the invasion, with further results revealing that negative sentiments negatively impact FinTech and blockchain market stocks, implying that negative sentiment induces irrational investor behavior and increases noise trader loss aversion and herding behavior.

Keywords: Russia-Ukraine war, economic sanctions, fintech, blockchain, quantile approaches

Suggested Citation

Abakah, Emmanuel Joel Aikins and Adeabah, David and Tiwari, Aviral Kumar and Abdullah, Mohammad, Analyzing the Effect of Public Sentiment Towards Economic Sanctions News during Russia-Ukraine Conflict on Blockchain Market and Fintech Industry (October 14, 2022). International Review of Financial Analysis, 90, 102948, https://doi.org/10.1016/j.irfa.2023.102948, Available at SSRN: https://ssrn.com/abstract=4359071 or http://dx.doi.org/10.2139/ssrn.4359071

Emmanuel Joel Aikins Abakah (Contact Author)

University of Ghana - University of Ghana Business School (UGBS) ( email )

Volta Rd
Accra
Ghana

David Adeabah

Curtin University ( email )

Kent Street
Bentley
Perth, WA WA 6102
Australia

University of Ghana - University of Ghana Business School (UGBS) ( email )

Volta Rd
Accra
Ghana

Aviral Kumar Tiwari

Indian Institute of Management Bodh Gaya ( email )

Uruvela, Prabandh Vihar, Bodh Gaya
Bodh Gaya, 824234
India

Mohammad Abdullah

Universiti Sultan Zainal Abidin (UniSZA) ( email )

Faculty of Business and Management
Kuala Nerus, 21300
Malaysia

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