The impact of economic sanctions on the decision of foreign firms to exit from Russia

Andrei Panibratov and Shenglong Chen

Chapter 8 in Research Handbook on Foreign Exit, Relocation and Re-entry, 2022, pp 159-167 from Edward Elgar Publishing

Abstract: The purpose of this chapter is to discuss the role of economic sanctions for the exit (divestment) decision of Western multinational enterprises (MNEs) from Russia. We explore the factors of exit decisions and corresponding MNEs' strategies through insight from management and organizational theories and suggest a theoretical framework based on institutional theory and transaction cost approach to better understand and explain exit decisions. The chapter will apply the cross-case analysis of several MNEs' exit decisions with particular attention to the non-market factors (i.e., the institutional pressure, liability of foreignness, and cultural distance) that affected firms' exit strategy and divestment mode. The chapter will contribute to the non-market strategy literature and suggest a better understanding of the role of economic sanctions for international firms.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2022
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