Russian Business under Economic Sanctions: Is There Regional Heterogeneity?

Shida, Yoshisada (2019): Russian Business under Economic Sanctions: Is There Regional Heterogeneity?

Abstract

The sanctions against Russia, beginning in early 2014, provide us with a unique opportunity to study whether, and how sanctions affect a vast territorial global superpower. This study attempts to empirically examine the economic impact of this event, paying particular attention to the existence or nonexistence of its regional heterogeneity. For these purposes, this study used a dataset from a survey that asked the executive managers of Russian regional companies to assess the impact on their management activities in late 2015. The key findings are as follows. First, approximately half of those interviewed perceived the economic sanctions as having a negative impact. Second, no regional variations in the impact of the sanctions could be found. It follows that financial sanctions, aimed at an entire nation, exert a significant and geographically uniform impact. Moreover, even regional businesses near the Asia-Pacific region, holding strong connections with Asian countries, cannot avoid its impact.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic sanctions, enterprise survey, Far East, Russian economy
• Subjects: F - International Economics > F5 - International Relations, National Security, and International Political Economy > F51 - International Conflicts ; Negotiations ; Sanctions; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics > M21 - Business Economics; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P27 - Performance and Prospects

References

Ahn, Daniel P. and Rodney Ludema (2016). “Measuring Smartness: Understanding the Economic Impact of Targeted Sanctions,” Working Paper, 2017-01, U.S. Department of State, Office of the Chief Economist.

Arai, Hirofumi and Ichiro Iwasaki (2018). “Market Quality in the Russian Far East from the Viewpoint of Company Management: Preliminary Report on Microeconomic Comparative Analysis with European Regions,” ERINA Discussion Paper, No. 1602-e, November (revised version).

Connolly, Richard (2016). “The Empire Strikes Back: Economic Statecraft and the Securitisation of Political Economy in Russia,” Europe-Asia Studies, Vol.68 (4), pp. 750–773.

Dreger, Christian, Konstantin A. Kholodilin, Dirk Ulbricht, and Jarko Fidrmuc (2016). “Between the Hammer and the Anvil: The Impact of Economic Sanctions and Oil Prices on Russia’s Ruble,” Journal of Comparative Economics, Vol. 44 (2), pp. 295–308.

Dreyer, Iana and Nicu Popescu (2014). “Do Sanctions against Russia Work?” European Union Institute for Security Studies¸ No. 35, December.

Ershov, Mikhail V. (2016). “What Economic Policy Does Russia Need Under the Sanctions?” Problems of Economic Transition, Vol. 58 (3), pp. 181–202.

Golikova, Victoria and Boris Kuznetsov (2017). “Perception of Risks Associated with Economic Sanctions: the Case of Russian Manufacturing,” Post-Soviet Affairs, Vol. 33 (1), pp. 49–62.

Gurvich, Evsey, and Ilya Prilepskiy (2015). “The Impact of Financial Sanctions on the Russian Economy,” Russian Journal of Economics, Vol.1 (4), pp. 359–385.

Gurvich, Evsey, and Ilya Prilepskiy (2018). “Western Sanctions and Russian Reponses: Effects after Three Years,” in: Torbjon Becker and Susanne Oxenstierna, eds., The Russian Economy under Putin, London and New York: Routledge.

Kholodilin, Konstantin A. and Aleksei Netsunajev (2016). “Crimea and Punishment: The Impact of Sanctions on Russian and European Economies,” DIW Berlin Discussion Papers, No. 1569.

Hasselbach, Christoph (2014). “Resistance Grows in EU to New Russia sanctions,” Deutsche Welle, 5 September.

Hufbauer, Gary C., Jeffrey J. Schott, Kimberly A. Elliott, and Barbara Oegg (2007). Economic Sanctions Reconsidered, 3rd edition, Washington, D.C.: Peterson Institute for International Economics.

International Monetary Fund (IMF) (2015). “Russian Federation: 2015 Article IV Consultation,” IMF Country Report, No. 15/211.

Johnston, Cameron (2015). “Sanctions against Russia: Evasion, Compensation and Overcompliance,” European Union Institute for Security Studies Briefs, No. 13, May.

Leonard, Carol S., Zafar Nazarov, and Elena S. Vakulenko (2016). “The Impact of Sub-national Institutions: Recentralization and Regional Growth in the Russian Federation (2001–2008),” Economics of Transition, Vol. 24 (3), pp. 421–446.

Mau, Vladimir (2016). “Between Crises and Sanctions: Economic Policy of the Russian Federation,” Post-Soviet Affairs, Vol. 32 (4), pp. 350–377.

Milov, Vladimir (2017). “Why Sanctions Matter,” The American Interest, August 14, 2017.

Nelson, Rebecca M. (2017). “U.S. Sanctions and Russia’s Economy,” Congressional Research Service, R43895, February.

Orlova, Nataliya V. (2016). “Financial Sanctions: Consequences for Russia’s Economy and Economic Policy,” Problems of Economic Transition, Vol. 58 (3), pp. 203–217.

Pestova, Anna A. and Mikhail E. Mamonov (2017). “Should We Care on the Economic Effects of Western Sanctions on Russia” (mimeo). Available at: https://sisu.ut.ee/sites/default/files/nem2017/files/pestova_mamonov_final.pdf.

Rapoza, Kenneth (2017). “Here’s How Europe’s Russian Sanctions Differ from Washington’s,” Forbes, June 23.

Russell, Martin (2018). “Sanctions over Ukraine: Impact on Russia,” European Parliament Briefing, EPRS, Members’ Research Service, PE 579.084, January.

Shirov, A.A, A.A. Yantovskii, and V.V. Potapenko (2015). “Evaluation of the Potential Effect of Sanctions on the Economic Development of Russia and the European Union,” Studies on Russian Economic Development, Vol. 26 (4), pp. 317–326.

Tuzova, Yelena and Faryal Qayum (2016). “Global Oil Glut and Sanctions: The Impact on Putin’s Russia,” Energy Policy, Vol. 90, pp. 140–151.

Ulyukaev, Alexei and Vladimir Mau (2015). “Ot ekonomicheskogo krizisa k ekonomicheskomu rostu, ili kak ne dat’ krizisu prevratit’sia v stagnatsiiu,” Voprosy ekonomiki, No. 4 (2015), pp. 5–19.

Veebel, Viljar and Raul Markus (2016). “At the Dawn of a New Era of Sanctions: Russian-Ukrainian Crisis and Sanctions,” Orbis, Vol. 60 (1), pp. 128139.

World Bank (2018). Rolling Back Russia’s Spatial Disparities: Re-assembling the Soviet Jigsaw under a Market Economy, World Bank Group, May 2018.

Zakirova, D.F. and E.F. Zakirova (2018). “Otsenka vliianiia ekonomicheskikh sanktsii na bankovskuiu sistemu Rossiiskoi Federatsii,” Aktual’nyi problemy ekonomiki i prava, Vol. 12 (1), pp. 1932.

Zubarevich, Natalya (2015). “The Regional Dimension of the New Russian Crisis,” Social Sciences: A Quarterly Journal of the Russian Academy of Sciences, Vol. 15, No. 4, pp. 3–18.