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The impact of sanctions on the activities of Russian companies in the manufacturing sector of the economy in 2014-2021

Author

Listed:
  • Zaytsev, Yu.

    (Institute for Applied Economic Research, RANEPA, Moscow, Russia)

  • Loshchenkova, A.

    (Institute of International Economics and Finance, Moscow, Russia
    Russian Foreign Trade Academy of the Ministry for Economic Development of the Russian Federation, Moscow, Russia)

Abstract

The article assesses the impact of the western sanctions on Russian companies from the manufacturing sector in the period 2014-2021. The authors review estimates of the impact of sanctions on the economies of countries around the world. The analysis showed that in all recipient countries, imports of enterprises were more affected. In this regard, they actively applied import substitution strategies. As for the Russian economy, the assessment was carried out on such indicators as revenue, gross value added, exports and imports of domestic enterprises. Analysis for the period 2014-2021 showed that the lost revenue of sanctioned processing companies for the period from 2014 to 2021 amounted to almost 278.4 billion rubles, and the underproduced GVA was about 80 billion rubles. At the same time the largest losses were recorded by sanctioned companies from the oil refining sector (?167.8 billion rubles), producing finished metal products (?50.9 billion rubles) and other vehicles and equipment (?46.8 billion rubles). Losses associated with unfulfilled exports due to the impact of sanctions amounted to almost USD2.3 billion, and unfulfilled imports for the specified period amounted to USD429.5 million. The authors offer a number of recommendations for overcoming the negative consequences of sanctions for individual sectors, pointing out the possible risks of the strategy of reorienting trade flows by sanctions companies towards China in the long term.

Suggested Citation

  • Zaytsev, Yu. & Loshchenkova, A., 2023. "The impact of sanctions on the activities of Russian companies in the manufacturing sector of the economy in 2014-2021," Journal of the New Economic Association, New Economic Association, vol. 60(3), pages 50-65.
    • Handle: RePEc:nea:journl:y:2023:i:60:p:50-65
    DOI: 10.31737/22212264_2023_3_50-65
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    References listed on IDEAS

    as
    1. Yury Zaytsev, 2016. "Diagnostics of foreign direct investments inflow in Russian Federation: theoretical and practical issues," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 9(2), pages 170-181.
    2. Gary Clyde Hufbauer & Kimberly Ann Elliott & Tess Cyrus & Elizabeth Winston, 1997. "US Economic Sanctions: Their Impact on Trade, Jobs, and Wages," Working Paper Series Working Paper Special (2), Peterson Institute for International Economics.
    3. repec:wsr:wpaper:y:2015:i:138 is not listed on IDEAS
    4. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 2009. "Economic Sanctions Reconsidered, 3rd Edition (paper)," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4129, April.
    5. Drezner, Daniel W., 2000. "Bargaining, Enforcement, and Multilateral Sanctions: When Is Cooperation Counterproductive?," International Organization, Cambridge University Press, vol. 54(1), pages 73-102, January.
    6. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 2009. "Economic Sanctions Reconsidered, 3rd Edition softcover with CD," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4310, January.
    7. Biglaiser, Glen & Lektzian, David, 2011. "The Effect of Sanctions on U.S. Foreign Direct Investment," International Organization, Cambridge University Press, vol. 65(3), pages 531-551, July.
    8. Gharehgozli, Orkideh, 2017. "An estimation of the economic cost of recent sanctions on Iran using the synthetic control method," Economics Letters, Elsevier, vol. 157(C), pages 141-144.
    9. Jiawen Yang & Hossein Askari & John Forrer & Hildy Teegen, 2004. "US Economic Sanctions Against China: Who Gets Hurt?," The World Economy, Wiley Blackwell, vol. 27(7), pages 1047-1081, July.
    10. Gurvich, Evsey & Prilepskiy, Ilya, 2015. "The impact of financial sanctions on the Russian economy," Russian Journal of Economics, Elsevier, vol. 1(4), pages 359-385.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Zaytsev, Yu. & Loshchenkova, A., 2024. "The impact of sanctions on the revenues of Russian companies," Journal of the New Economic Association, New Economic Association, vol. 63(2), pages 57-74.

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    More about this item

    Keywords

    economic sanctions; manufacturing sector of economy; Russian business; gross value added; foreign trade; Russian Federation;
    All these keywords.

    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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