Corporate Credibility Under Geopolitical Pressure

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.