Strategies of Russian companies to adapt to the 2022 sanctions

M. Kuzyk and Yu. Simachev
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M. Kuzyk: HSE University, Moscow, Russia
Yu. Simachev: HSE University, Moscow, Russia

Journal of the New Economic Association, 2023, vol. 60, issue 3, 172-180

Abstract: The article discusses the peculiarities of Russian manufacturing firms' reaction to the 2022 sanctions. By the fall of 2022, 69% of firms felt some impact of sanctions, with 53% of firms experienced negative effects, while only 7% achieved positive results. The key negative effects of the sanctions pressure on firms were higher domestic prices for raw materials and components, difficulties in importing them, logistical problems, reduced domestic demand, and difficulties in importing and maintaining equipment. Over half of the companies took some actions to adapt to the sanctions shock. The main measures taken by companies to adapt to the new restrictions were switching to new suppliers (more often foreign ones) and cost cutting. Along with strategies based on restrictive measures (reducing costs, investments, personnel and product range) and changing suppliers, a number of companies implemented a development strategy that combined innovative measures and increased interaction with authorities. Competitive companies that had been innovating and exporting before the second wave of sanctions were more likely to implement the development strategy - such firms are used to operating in highly competitive international markets, being flexible and active.

Keywords: Russian companies; 2022 sanctions; impact of sanctions; adaptation strategies (search for similar items in EconPapers)
JEL-codes: D22 F51 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2023:i:60:p:172-180

DOI: 10.31737/22212264_2023_3_172-180

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