Russia’s war is a test case of businesses’ willingness to unwind the cross-border ties that have been deepening since the fall of the Berlin Wall. While most Western corporations with business in Russia have announced plans to exit the country, the data show that very few have followed through.
ST. GALLEN/LAUSANNE – The fallout from Russia’s invasion of Ukraine is still reverberating in corporate boardrooms around the world. Since continuing peace and geopolitical stability can no longer be assumed, two implicit pillars of many businesses’ international strategies have begun to fracture. Western governments – swayed more by national-security officials now than in the recent past – are demanding that domestic firms decouple from autocratic regimes.
Russia’s appalling, unprovoked war is a test case of businesses’ willingness to unwind the cross-border ties that have been deepening since the fall of the Berlin Wall. European Union and G7 countries were the first to impose sanctions on Russia, and Western companies with subsidiaries in Russia have been under significant pressure to divest. But what matters is how much they have actually pulled up stakes.
In recently published research, we set out to answer the following empirical questions: In the nine months after the invasion, to what extent did Western businesses actually divest from their Russian subsidiaries? What was the commercial footprint of exiting firms compared to those that stayed? And were companies headquartered in certain Western countries more likely to leave than others?
ST. GALLEN/LAUSANNE – The fallout from Russia’s invasion of Ukraine is still reverberating in corporate boardrooms around the world. Since continuing peace and geopolitical stability can no longer be assumed, two implicit pillars of many businesses’ international strategies have begun to fracture. Western governments – swayed more by national-security officials now than in the recent past – are demanding that domestic firms decouple from autocratic regimes.
Russia’s appalling, unprovoked war is a test case of businesses’ willingness to unwind the cross-border ties that have been deepening since the fall of the Berlin Wall. European Union and G7 countries were the first to impose sanctions on Russia, and Western companies with subsidiaries in Russia have been under significant pressure to divest. But what matters is how much they have actually pulled up stakes.
In recently published research, we set out to answer the following empirical questions: In the nine months after the invasion, to what extent did Western businesses actually divest from their Russian subsidiaries? What was the commercial footprint of exiting firms compared to those that stayed? And were companies headquartered in certain Western countries more likely to leave than others?