Exiting Russia

Overview

This study examines the exit of foreign-invested firms from Russia following the February 2022 invasion of Ukraine. The research analyzes company registration data tracking the fate of over forty thousand foreign-invested enterprises operating in Russia prior to the war. The analysis focuses on exit as a politicized transaction characterized by external pressures and bilateral bargaining between sellers and buyers, rather than treating exit as a purely market-driven phenomenon.

Methods and approach

The study utilizes company registration data to document changes in ownership status and operational activity among foreign-invested firms in Russia over an 18-month period following the initiation of hostilities. The researchers conceptualize exit as a bargaining process embedded within political constraints and external pressures. Analysis examines sectoral patterns, distinguishing between consumer-oriented industries and strategic sectors, as well as the prior managerial structure of foreign-invested firms to assess differential propensities toward exit.

Key Findings

Approximately 33.3 percent of foreign-invested firms underwent ownership changes or became inactive within 18 months of the war's onset. Firms operating in consumer-oriented industries demonstrated elevated exit propensities relative to other sectors. Russian state interests significantly shaped exit outcomes: foreign-invested firms already subject to Russian managerial control exhibited higher exit rates, whereas firms operating in sectors designated as strategically important to Russia showed lower exit propensities despite economic sanctions and reputational pressures.

Implications

The findings indicate that multinationals function as inconsistent instruments of economic statecraft, maintaining presence and operational continuity even under conditions of comprehensive sanctions regimes and heightened social opposition to continued commercial engagement. The politicization of exit transactions and the influence of state interests in determining exit outcomes suggest that purely economic factors insufficiently explain firm behavior during geopolitical crises.

Scope and limitations

This summary is based on the study abstract and available metadata. It does not include a full analysis of the complete paper, supplementary materials, or underlying datasets unless explicitly stated. Findings should be interpreted in the context of the original publication.