Discussion paper

DP17415 The Impact of Foreign Sanctions on Firm Performance in Russia

We assess the economic effects of two decades of recent sanctions on Russian firms. We find that foreign sanctions leave energy firms in Russia unaffected but do undermine firm performance in the other (non-energy) sectors. In these other sectors, sanctions have a negative impact on capital expenditures and R&D intensity. Cost of capital and firm-level political risk also increase in sanctions. While firms with connections to Russian oligarchs linked to Putin are unaffected, sanctions do not differentiate in their impact between firms with Russian and foreign origin. Russian firms seemingly were prepared for the Crimea event and the Ukraine war.

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Citation

Huynh, L and S Ongena (2022), ‘DP17415 The Impact of Foreign Sanctions on Firm Performance in Russia‘, CEPR Discussion Paper No. 17415. CEPR Press, Paris & London. https://cepr.org/publications/dp17415