Leave Not Stay: Analysis of the Behavior of European Companies Under Sanctions on Russia

This study aims to assess the real scale of European companies leaving the Russian market after the start of the Special Military Operation and their interest in working in Russia. Expert assessments are based on original databases data of foreign companies’ behavior and their participation in Russian industry exhibitions after February 24, 2022, compiled by authors based on the Center for Expertise on Sanctions Policy, MGIMO University. The study tries to more objectively assess European companies’ behavior in the Russian market amid an unprecedented corporate boycott, as well as to identify the factors determining the choice of certain behavior model, which is possible due to a more critical approach to analyzing the most speculative strategy “leave the market”. The research found that the leaders in the number of companies leaving Russia are the UK, Germany, Finland, Poland and Switzerland. The companies with the largest share of the Russian market in their income structure also left the Russian market most willingly, thus, European companies would better turn down commercial benefits to comply with sanctions than companies from other countries. At the same time, Italian, German and Spanish companies are least willing to leave trade, agricultural and food sectors. Therefore, the scale of the negative impact on the Russian economy appeared to be lower than analysis estimates of the list of companies.

International sanctions, Russia, corporate boycott, European companies, market withdrawal, commercial interest, political risk