The Russian Invasion of Ukraine and Its Effect on the Swedish Defense Industry - : A Case Study of SAAB’s Order Bookings through Multilinear Regression Analysis

Sammanfattning

This bachelor thesis investigates whether the Russian invasion of Ukraine affected the Swedish defense industry, using multiple linear regression with SAAB’s order bookings as the dependent variable. Data were collected from multiple public sources e.g. Statistiska Centralbyrån (SCB), SAAB annual reports, and Nasdaq. Eight independent variables were selected based on theoretical and practical relevance: SAAB's order backlog, SAAB's EBIT, the Swedish national defense budget, national media coverage of SAAB, OMXSPI (a Swedish stock market index), SAAB B-share price, inflation rate, and a binary dummy variable indicating the period following the 2022 invasion. The regression results indicate that the Russian invasion did have a measurable effect on SAAB’s order bookings, with the dummy variable showing statistical significance at the 5%-level. Among all the regressors, order backlog exhibited the strongest explanatory power, highlighting its central role in predicting new orders. Furthermore, the analysis identified the years 2015 and 2022 as particularly influential points in the dataset. The anomaly in 2015 may be partially explained by the geopolitical tension following Russia’s annexation of Crimea in 2014, suggesting a lagged industry response to this important historical event. The study’s robustness was ensured through various diagnostic tools, including both residual and influential analysis, multicollinearity checks, cross-validation, bootstrapping, and the application of the Box-Cox transformation. Beyond statistical analysis, the findings are interpreted through a business and management lens, discussing how the results could support strategic planning at SAAB. Overall, this study contributes to a deeper understanding of how geopolitical shocks can influence national defense industries and provides actionable insights for stakeholders in the industry.