Abstract
This study examines stock market reactions to the inauguration of the Board of Peace (BoP). Using an event-study framework that accounts for cross-sectional dependence, we analyze abnormal returns for 83 publicly listed aerospace and defense firms across 17 countries. We find a significant pre-event run-up, consistent with early market anticipation. At the announcement, returns diverge across firms, generating a membership premium: firms from member countries experience positive abnormal returns, while non-members do not. Apparent sectoral differences are largely explained by this membership composition rather than intrinsic industry effects. Overall, the findings highlight the role of political alignment in shaping market responses to new geopolitical institutions.