The Reaction of Foreign Manufacturing Corporations Operating in Russia to the New Sanctions that Followed the Outbreak of the Russia–Ukraine Military Conflict

ABSTRACT

This study examines the reaction of foreign manufacturing corporations in Russia to the strong sanctions imposed by Western countries on Russia in the first months after the outbreak of the Russia–Ukraine military conflict in March 2022. While the majority of Western companies announced different types of changes in their operations in Russia, a significant share of industrial corporations did not publicly announce planned changes in their operations. Notably, less than 17 percent of corporations that opened new factories in Russia between 2012 and 2019 announced self-restrictions of operations or an intention to divest their Russian assets.

Acknowledgments

We wish to thank Galina Balashova for her assistance in data processing and two anonymous reviewers for their valuable comments and suggestions on an earlier draft of the paper.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1. A special website #ВСЕЗАПОМНИМ (#WE WILL REMEMBER EVERYTHING) is devoted to announcements of foreign companies regarding radical changes of their operations in Russia. That resource turned out to be quite reliable – we randomly checked information on announcements of several corporations presented on that site and corporate websites and found that the date of an announcement was accurate, the text of an announcement was presented in full, and if the announcement was made in a foreign language, the translation of the full text was professionally made without any corrections. The last update of that database was made on July 14, 2023, and the total number of foreign corporations on which information is provided was 743.

2. Unfortunately, we were not allowed to mention the names of the companies described in the short case studies.

3. всезапомнимрф (vsezapomim.rf). is a link to the database #ВСЕЗАПОМНИМ (see note 1). The alternative link to this database without using the Cyrillic alphabet is https://xn–80adjigxbghjs.xn–p1ai/.

4. Here, we considered the general dynamic of an industry in the first half of 2022.

Additional information

Funding

This study was undertaken with the support of a research grant from the Graduate School of Business, National Research University Higher School of Economics, Moscow, within the project “Russian subsidiaries of foreign multinational corporations” [Project 2021.003SP.1].