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Export and Import Activities of Russian Companies With FDI in the Context of Sanctions

Elena A. Fedorova (), Aleksei E. Nikolaev (), Yuliya S. Shirokova () and Fedor Yu. Fedorov ()
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Elena A. Fedorova: Financial University under the Government of the Russian Federation, Moscow 125993, Russia; National Research University Higher School of Economics, Moscow 101000, Russia
Aleksei E. Nikolaev: National Research University Higher School of Economics, Moscow 101000, Russia
Yuliya S. Shirokova: National Research University Higher School of Economics, Moscow 101000, Russia
Fedor Yu. Fedorov: JSC “Publicis Media”, Moscow 125040, Russian Federation

Finansovyj žhurnal — Financial Journal, 2019, issue 3, 75-90

Abstract: This research evaluates the efficiency of exporting and importing companies with FDI. In their study, the authors set up a hypothesis that companies with export and import activities are the most efficient. They are followed by only importing companies and then by companies that only export; the least efficient are fully domestically-owned firms which do not participate in international trade. Another hypothesis is dedicated to the assessment of influence of imposed sanctions on importing companies’ productivity. As a research methodology, the return on assets (ROA) index for companies with FDI in comparison with national enterprises is used to test the first hypothesis. Moreover, for the same purpose the authors apply the classic approach of the DEA method as well as DEA with the regard for spillover effects from FDI. The second hypothesis is examined with the help of the Malmquist index for importing and exporting firms. The empirical database consists of approximately 170,000 records of more than 33,000 Russian enterprises, taking into account to which of the six major sectors of the Russian economy they belong. As a result of the study, the authors conclude that companies with FDI are characterized with a higher level of efficiency compared to companies without foreign capital. Furthermore, international companies are more efficient than enterprises which do not take part in international trade. Concerning the second hypothesis, the authors establish that the sanctions have a negative impact on importing companies’ efficiency, which is especially evident in comparison with growing productivity of exporting firms. This trend could be explained by decreasing FDI inflows into the country and also import restrictions by imposed sanctions, which adversely affect importing companies’ efficiency.

Keywords: import; export; companies with FDI; technical efficiency; sanctions; DEA; Malmquist index (search for similar items in EconPapers)
JEL-codes: E22 F21 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.31107/2075-1990-2019-3-75-90

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