The Reaction of Foreign Manufacturing Corporations Operating in Russia to the New Sanctions that Followed the Outbreak of the Russia–Ukraine Military Conflict
This study examines the reaction of foreign manufacturing corporations in Russia to the strong sanctions imposed by Western countries on Russia in the first months after the outbreak of the Russia-Ukraine military conflict. While service companies and many industrial corporations operating in Russia announced different types of changes in their operations (e.g., self-restriction of investments, shortening the range of products, intentions to exit from Russian assets, and so on), as well as the temporary cessation of operations due mostly to logistical problems and the deficit of components, a significant share of industrial corporations did not publicly announce the planned changes in their operations. Notably, less than 17% of corporations that opened new factories in Russia between 2012 and 2019 announced self-restrictions of operations or intentions to divest their Russian assets. In this study, we reveal the factors that stimulate or impede intentions to exit Russia and highlight several factors that are missing in the extant literature on foreign subsidiary divestment.