Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/340650 
Authors: 
Year of Publication: 
2025
Citation: 
[Journal:] Borsa İstanbul Review [ISSN:] 2214-8469 [Volume:] 25 [Issue:] 6 [Year:] 2025 [Pages:] 1486-1506
Publisher: 
Elsevier, Amsterdam
Abstract: 
This study examines the financial price of reputational backlash against Israeli firms following the Gaza War on October 7, 2023. We develop a sentiment-trade interaction framework that integrates Google Trends hostility queries, GDELT media tone, and a composite sentiment index with Israel's bilateral trade exposure. Using a panel of 516 Israeli listed firms, we estimate a triple-interaction model that separates direct war effects from reputational backlash transmitted through bilateral trade linkages. Results show that a one-standard-deviation rise in backlash erased one to two months of typical equity gains, with effects most pronounced in Muslim-majority countries. Sectoral regressions reveal severe penalties in industrials, financials, basic materials, energy, and consumer-facing sectors, while defense and technology were comparatively insulated. Firm-level heterogeneity highlights stronger losses among firms with high foreign institutional ownership, insider concentration, ESG risk, and leverage. A step-dummy approach confirms persistence, underscoring how moral backlash imposes market penalties absent formal sanctions.
Subjects: 
Boycott economics
Gaza war
Geopolitical backlash
Israeli firms
Reputational risk
Sentiment spillovers
Trade interconnectedness
JEL: 
G12
G15
F51
M14
H56
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
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