Факторы, влияющие на прекращение деятельности иностранных компаний в России / Factors affecting foreign companies' decision to leave russian market
Аннотация
Over the past few years, particularly in 2022, there has been a noticeable trend of foreign companies exiting Russia. This has raised concerns regarding its impact on both the Russian economy and the global market. Various factors, including economic, political, and social reasons, contribute to these exits. Gaining insights from detailed data on the departure of foreign companies from Russia is crucial for understanding the primary causes of this trend and its potential consequences. Consequently, this study aims to identify and analyze microdata concerning the departure of foreign companies from Russia, examining the reasons behind their exit, and evaluating its potential effects on the Russian economy and the global market.
The departure of foreign companies from Russia carries significant implications for both the Russian economy and the global market. These companies play a substantial role in the development of the Russian economy, generating employment opportunities and fostering market competition. Moreover, they serve as important partners to domestic Russian companies, granting access to new technologies, knowledge, and expertise. The withdrawal of foreign companies from Russia may result in adverse effects, including reduced investments, diminished competition, and a decline in job opportunities. Furthermore, it could undermine the confidence of foreign investors in the Russian market as a whole, leading to a decrease in foreign investment inflows.
On the global stage, the departure of foreign companies from Russia may impact international trade and global economic relations. It may trigger market redistributions and heightened competition in industries where these companies had significant presence. Additionally, it could influence Russia's relationships with other countries and international organizations. The withdrawal of foreign companies from Russia is a topic of utmost importance that warrants extensive research and demands the attention of the government, businesses, and society.
The examination of microdata pertaining to the departure of foreign companies from Russia holds immense significance, as it enables the identification of primary causes and trends associated with this phenomenon. Analyzing microdata on the departure of foreign companies helps in comprehending which sectors bear the greatest impact from this trend, while also shedding light on related factors encompassing economic, political, and social conditions.
Microdata research is instrumental in formulating effective measures to mitigate the adverse effects of foreign company departures from Russia. It aids in devising strategies to attract foreign investment and enhance the investment climate within the country. Additionally, analyzing microdata concerning the withdrawal of foreign companies facilitates the anticipation of potential consequences for industries, regions within Russia, and the global market. Such insights serve as valuable information for business analysts, governmental bodies, and other stakeholders when making decisions pertaining to economic development.
The departure of foreign companies from Russia carries significant negative consequences for both the Russian economy and the global market. Therefore, it is crucial to comprehend the reasons driving this trend and endeavor to establish a more favorable business environment to avoid potential long-term repercussions.
The objectives of this study encompass the following:
- identifying patterns, based on microdata, of foreign companies exiting Russia;
- analyzing the reasons behind the withdrawal of foreign companies from Russia;
- assessing the potential impact of foreign companies' departure from Russia on the Russian economy and the global market.
Examining the patterns of foreign companies leaving Russia is pivotal for understanding the underlying causes behind this trend and its potential repercussions on the Russian economy and the global market. By discerning microdata-based patterns, the study can provide insights into the specific drivers compelling foreign companies to exit Russia, as well as the sectors and regions most affected.
The study focuses on foreign companies that have already left Russia, with an emphasis on identifying patterns based on microdata. The primary databases employed are the Yale University Database and the SPARK-Interfact Database. The Yale database encompasses comprehensive data on foreign companies that have downsized their operations in Russia. The SPARK-Interfact Database, on the other hand, serves as a valuable source of information regarding companies operating within Russia. It provides detailed data on the financial performance of Russian companies, including their revenues, profits, and assets. Additionally, the database contains information about the ownership structure of these companies, as well as their compliance with legal and regulatory requirements. These data are derived from diverse sources, including company registration documents, financial statements, and government records.
The descriptive statistics used in this study allow for the description and analysis of various characteristics of companies, such as size, financial performance, number of employees, and others. The text indicates that descriptive statistics helped to identify the importance of small companies, which can use the departure of large foreign players from the market to their advantage. The descriptive statistics also helped to identify the major industries in which most foreign company exits occur, as well as establish the characteristics of these industries, such as capitalization and debt levels.
The probit model, which was used in the study, aims to explain the probability that a company will leave Russia. It is mentioned in the text that the model assessed the influence of various factors, such as number of employees, assets, revenues, profits, and others on companies' decision to leave Russia. The results of the model allowed us to identify the importance of these factors and understand how they affect companies' decision to leave the market.
This research offers valuable insights into the factors influencing the decisions of foreign companies to exit the Russian market. Through an analysis of the economic characteristics of legal entities established in Russia and the reactions of companies based on their country of origin and industry, we shed light on previously unexplored areas in the existing literature. To conduct our analysis, we employed the probit model. We examined a total of 1,386 companies listed in the Yale database and 1,712 entities owned by foreign companies, obtaining this data from the SPARK system.
Moreover, our descriptive statistics highlight the significance of smaller companies capitalizing on the departure of larger market players. Although there are gaps in the data for certain years, we were able to gather specific information for the period spanning 2019 to 2021. We have confirmed the validity of the first and third hypotheses, while rejecting the second hypothesis.
Our econometric model effectively explains the phenomenon of companies leaving Russia. Factors such as the number of employees, fixed assets, net assets, current assets, total assets, capital and reserves, revenue, cost of goods sold, gross profit, net profit, fixed assets turnover, debt-to-equity ratio, company age, and FRI (unspecified abbreviation) have a significant impact on companies' decisions to exit Russia.
The findings presented in this research paper provide valuable insights for Russian companies and policymakers to enhance the business environment in Russia. The departure of foreign companies from Russia is a concerning issue that necessitates attention from the government and local businesses.
Our research reveals that the communications services sector holds the highest average value in terms of capital among the industries studied. Approximately 5% of the companies that left Russia belonged to this sector. Additionally, we observe that the real estate sector leads in terms of leverage. This can be attributed to the fact that companies in this sector typically operate with substantial debt capital support. The IT sector exhibits the highest average number of employees, primarily due to the larger average size of foreign companies in this sector compared to their Russian counterparts. The materials sector ranks highest in terms of the volume of long-term financial investments, reflecting the capital-intensive nature of foreign companies in this sector, which allocate significant funds to technology and its implementation. Russian companies do not possess this characteristic. The materials sector includes chemistry, construction materials, and metallurgy.
We found that the majority of companies exiting Russia are from European countries and North America. Regarding the distribution of companies by the level of departure (categorized as A and B), these two categories comprise more than 50% of the total number of companies. Companies falling into these categories either completely left Russia or exited with the possibility of returning.
The industry with the largest number of companies is manufacturing, followed by consumer discretionary goods, information technology, and consumer staples. Each of the remaining categories constitutes less than 10% of the total.
One recommendation for Russian companies is to improve their competitive position in the market by leveraging the departure of larger foreign players. Smaller companies can gain a more substantial market share by offering innovative products and services that cater to the needs of local consumers. It is also advisable for them to invest in research and development to enhance their product quality and competitiveness.
Another recommendation for Russian companies is to foster a favorable business environment that attracts foreign investment. The government should provide tax incentives and reduce bureaucratic obstacles for foreign companies seeking to conduct business in Russia. Furthermore, local businesses should form partnerships with foreign companies to access new technologies and expand their customer base.
As for politicians, the government should prioritize policies that attract foreign investment and promote economic growth. This can be achieved by maintaining a stable political environment that encourages investment, upholding the rule of law, and safeguarding intellectual property rights. Additionally, the government should invest in infrastructure to cultivate a modern and efficient business environment.
The departure of foreign companies from Russia carries significant implications for both the Russian economy and the global market. These companies play a substantial role in the development of the Russian economy, generating employment opportunities and fostering market competition. Moreover, they serve as important partners to domestic Russian companies, granting access to new technologies, knowledge, and expertise. The withdrawal of foreign companies from Russia may result in adverse effects, including reduced investments, diminished competition, and a decline in job opportunities. Furthermore, it could undermine the confidence of foreign investors in the Russian market as a whole, leading to a decrease in foreign investment inflows.
On the global stage, the departure of foreign companies from Russia may impact international trade and global economic relations. It may trigger market redistributions and heightened competition in industries where these companies had significant presence. Additionally, it could influence Russia's relationships with other countries and international organizations. The withdrawal of foreign companies from Russia is a topic of utmost importance that warrants extensive research and demands the attention of the government, businesses, and society.
The examination of microdata pertaining to the departure of foreign companies from Russia holds immense significance, as it enables the identification of primary causes and trends associated with this phenomenon. Analyzing microdata on the departure of foreign companies helps in comprehending which sectors bear the greatest impact from this trend, while also shedding light on related factors encompassing economic, political, and social conditions.
Microdata research is instrumental in formulating effective measures to mitigate the adverse effects of foreign company departures from Russia. It aids in devising strategies to attract foreign investment and enhance the investment climate within the country. Additionally, analyzing microdata concerning the withdrawal of foreign companies facilitates the anticipation of potential consequences for industries, regions within Russia, and the global market. Such insights serve as valuable information for business analysts, governmental bodies, and other stakeholders when making decisions pertaining to economic development.
The departure of foreign companies from Russia carries significant negative consequences for both the Russian economy and the global market. Therefore, it is crucial to comprehend the reasons driving this trend and endeavor to establish a more favorable business environment to avoid potential long-term repercussions.
The objectives of this study encompass the following:
- identifying patterns, based on microdata, of foreign companies exiting Russia;
- analyzing the reasons behind the withdrawal of foreign companies from Russia;
- assessing the potential impact of foreign companies' departure from Russia on the Russian economy and the global market.
Examining the patterns of foreign companies leaving Russia is pivotal for understanding the underlying causes behind this trend and its potential repercussions on the Russian economy and the global market. By discerning microdata-based patterns, the study can provide insights into the specific drivers compelling foreign companies to exit Russia, as well as the sectors and regions most affected.
The study focuses on foreign companies that have already left Russia, with an emphasis on identifying patterns based on microdata. The primary databases employed are the Yale University Database and the SPARK-Interfact Database. The Yale database encompasses comprehensive data on foreign companies that have downsized their operations in Russia. The SPARK-Interfact Database, on the other hand, serves as a valuable source of information regarding companies operating within Russia. It provides detailed data on the financial performance of Russian companies, including their revenues, profits, and assets. Additionally, the database contains information about the ownership structure of these companies, as well as their compliance with legal and regulatory requirements. These data are derived from diverse sources, including company registration documents, financial statements, and government records.
The descriptive statistics used in this study allow for the description and analysis of various characteristics of companies, such as size, financial performance, number of employees, and others. The text indicates that descriptive statistics helped to identify the importance of small companies, which can use the departure of large foreign players from the market to their advantage. The descriptive statistics also helped to identify the major industries in which most foreign company exits occur, as well as establish the characteristics of these industries, such as capitalization and debt levels.
The probit model, which was used in the study, aims to explain the probability that a company will leave Russia. It is mentioned in the text that the model assessed the influence of various factors, such as number of employees, assets, revenues, profits, and others on companies' decision to leave Russia. The results of the model allowed us to identify the importance of these factors and understand how they affect companies' decision to leave the market.
This research offers valuable insights into the factors influencing the decisions of foreign companies to exit the Russian market. Through an analysis of the economic characteristics of legal entities established in Russia and the reactions of companies based on their country of origin and industry, we shed light on previously unexplored areas in the existing literature. To conduct our analysis, we employed the probit model. We examined a total of 1,386 companies listed in the Yale database and 1,712 entities owned by foreign companies, obtaining this data from the SPARK system.
Moreover, our descriptive statistics highlight the significance of smaller companies capitalizing on the departure of larger market players. Although there are gaps in the data for certain years, we were able to gather specific information for the period spanning 2019 to 2021. We have confirmed the validity of the first and third hypotheses, while rejecting the second hypothesis.
Our econometric model effectively explains the phenomenon of companies leaving Russia. Factors such as the number of employees, fixed assets, net assets, current assets, total assets, capital and reserves, revenue, cost of goods sold, gross profit, net profit, fixed assets turnover, debt-to-equity ratio, company age, and FRI (unspecified abbreviation) have a significant impact on companies' decisions to exit Russia.
The findings presented in this research paper provide valuable insights for Russian companies and policymakers to enhance the business environment in Russia. The departure of foreign companies from Russia is a concerning issue that necessitates attention from the government and local businesses.
Our research reveals that the communications services sector holds the highest average value in terms of capital among the industries studied. Approximately 5% of the companies that left Russia belonged to this sector. Additionally, we observe that the real estate sector leads in terms of leverage. This can be attributed to the fact that companies in this sector typically operate with substantial debt capital support. The IT sector exhibits the highest average number of employees, primarily due to the larger average size of foreign companies in this sector compared to their Russian counterparts. The materials sector ranks highest in terms of the volume of long-term financial investments, reflecting the capital-intensive nature of foreign companies in this sector, which allocate significant funds to technology and its implementation. Russian companies do not possess this characteristic. The materials sector includes chemistry, construction materials, and metallurgy.
We found that the majority of companies exiting Russia are from European countries and North America. Regarding the distribution of companies by the level of departure (categorized as A and B), these two categories comprise more than 50% of the total number of companies. Companies falling into these categories either completely left Russia or exited with the possibility of returning.
The industry with the largest number of companies is manufacturing, followed by consumer discretionary goods, information technology, and consumer staples. Each of the remaining categories constitutes less than 10% of the total.
One recommendation for Russian companies is to improve their competitive position in the market by leveraging the departure of larger foreign players. Smaller companies can gain a more substantial market share by offering innovative products and services that cater to the needs of local consumers. It is also advisable for them to invest in research and development to enhance their product quality and competitiveness.
Another recommendation for Russian companies is to foster a favorable business environment that attracts foreign investment. The government should provide tax incentives and reduce bureaucratic obstacles for foreign companies seeking to conduct business in Russia. Furthermore, local businesses should form partnerships with foreign companies to access new technologies and expand their customer base.
As for politicians, the government should prioritize policies that attract foreign investment and promote economic growth. This can be achieved by maintaining a stable political environment that encourages investment, upholding the rule of law, and safeguarding intellectual property rights. Additionally, the government should invest in infrastructure to cultivate a modern and efficient business environment.