The Impact of Foreign Sanctions on Firm Performance in Russia

Luu Duc Toan Huynh, Khanh Hoang and Steven Ongena

No 17415, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: 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.

Keywords: Firm performance; Russia; Sanctions; Political connection (search for similar items in EconPapers)
JEL-codes: G20 O16 (search for similar items in EconPapers)
Date: 2022-06
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Working Paper: The Impact of Foreign Sanctions on Firm Performance in Russia (2023)
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