From Russia with love: International risk-sharing, sanctions, and firm investments

Kiet Tuan Duong, Luu Duc Toan Huynh, Anh Dang Bao Phan and Nam T. Vu

Economics Letters, 2024, vol. 244, issue C

Abstract: We propose a novel explanation for why sanctions on Russian firms might not work as intended: these firms’ ability to diversify sanction risks via partner countries friendly with Russia. Using indirect links with partner firms as a plausibly exogenous proxy for this risk-sharing channel, we show that exposed Russian firms were able to leverage these links to alleviate the negative impacts of sanctions in 2014.

Keywords: International risk-sharing; Sanction; Russia; Firm-level (search for similar items in EconPapers)
JEL-codes: F31 F41 F42 F51 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004890

DOI: 10.1016/j.econlet.2024.112005

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