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Stakeholder activism and foreign firm exit from Russia in 2022

Author

Listed:
  • Alex Knorre
  • Ruslan Kuchakov
  • Dmitriy Skougarevskiy

    (Public Economics Department & CERME - FSEG - UDs)

Abstract

We study foreign firm exit from Russia following the 2022 offensive in Ukraine. Using administrative data on the universe of equity ownership in Russia we find that Western-owned firms that exited Russia in 2022 accounted for 1.5%, 3.1%, and 3.6% of capital stock, revenues, and wage bill in 2021, respectively. Exiting firms comprised almost 1/4 of total Western firm output in Russia. In a triple difference design we show that stakeholder activism contributed to firm exit. Inclusion of a Western company on the Yale School of Management list of companies with exposure to Russia increased the probability of its exit by 12.7 p.p. (+106.7% in relation to pre-conflict exit rate) We study foreign firm exit from Russia following the 2022 offensive in Ukraine. Using administrative data on the universe of equity ownership in Russia we find that Western-owned firms that exited Russia in 2022 accounted for 1.5%, 3.1%, and 3.6% of capital stock, revenues, and wage bill in 2021, respectively. Exiting firms comprised almost 1/4 of total Western firm output in Russia. In a triple difference design we show that stakeholder activism contributed to firm exit. Inclusion of a Western company on the Yale School of Management list of companies with exposure to Russia increased the probability of its exit by 12.7 p.p. (+106.7% in relation to pre-conflict exit rate) We study foreign firm exit from Russia following the 2022 offensive in Ukraine. Using administrative data on the universe of equity ownership in Russia we find that Western-owned firms that exited Russia in 2022 accounted for 1.5%, 3.1%, and 3.6% of capital stock, revenues, and wage bill in 2021, respectively. Exiting firms comprised almost 1/4 of total Western firm output in Russia. In a triple difference design we show that stakeholder activism contributed to firm exit. Inclusion of a Western company on the Yale School of Management list of companies with exposure to Russia increased the probability of its exit by 12.7 p.p. (+106.7% in relation to pre-conflict exit rate) We study foreign firm exit from Russia following the 2022 offensive in Ukraine. Using administrative data on the universe of equity ownership in Russia we find that Western-owned firms that exited Russia in 2022 accounted for 1.5%, 3.1%, and 3.6% of capital stock, revenues, and wage bill in 2021, respectively. Exiting firms comprised almost 1/4 of total Western firm output in Russia. In a triple difference design we show that stakeholder activism contributed to firm exit. Inclusion of a Western company on the Yale School of Management list of companies with exposure to Russia increased the probability of its exit by 12.7 p.p. (+106.7% in relation to pre-conflict exit rate)

Suggested Citation

  • Alex Knorre & Ruslan Kuchakov & Dmitriy Skougarevskiy, 2024. "Stakeholder activism and foreign firm exit from Russia in 2022," Economics Bulletin, AccessEcon, vol. 44(1), pages 64-73.
    • Handle: RePEc:ebl:ecbull:eb-23-00434
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    File URL: http://www.accessecon.com/Pubs/EB/2024/Volume44/EB-24-V44-I1-P6.pdf
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    References listed on IDEAS

    as
    1. Simon J. Evenett & Niccolò Pisani, 2023. "Geopolitics, conflict, and decoupling: evidence of Western divestment from Russia during 2022," Journal of International Business Policy, Palgrave Macmillan, vol. 6(4), pages 511-540, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    firm exit; divestment; Russia; Ukraine;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F3 - International Economics - - International Finance

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