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From Russia with love: International risk-sharing, sanctions, and firm investments

Author

Listed:
  • Duong, Kiet Tuan
  • Huynh, Luu Duc Toan
  • Phan, Anh Dang Bao
  • Vu, Nam T.

Abstract

We propose a novel explanation for why sanctions on Russian firms might not work as intended: these firms’ ability to diversify sanction risks via partner countries friendly with Russia. Using indirect links with partner firms as a plausibly exogenous proxy for this risk-sharing channel, we show that exposed Russian firms were able to leverage these links to alleviate the negative impacts of sanctions in 2014.

Suggested Citation

  • Duong, Kiet Tuan & Huynh, Luu Duc Toan & Phan, Anh Dang Bao & Vu, Nam T., 2024. "From Russia with love: International risk-sharing, sanctions, and firm investments," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004890
    DOI: 10.1016/j.econlet.2024.112005
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    More about this item

    Keywords

    International risk-sharing; Sanction; Russia; Firm-level;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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