Which Foreign Companies Are Leaving Russia? Microdata-Based Patterns

Abstract

This study examines patterns of foreign company exits from Russia using SPARK-Interfax and Yale University microdata. Based on a sample of 1,715 companies, we identify the reasons for their departure, as well as the industries most affected by foreign company exits and the countries that most actively leaving the Russian market. Our results show that the determinants of a company's decision are capital intensity, number of employees, time in country, and the company's rate of profit growth. In addition, we find that the most affected industries are manufacturing, wholesale and retail trade, and information technology. The findings have important implications for policymakers and investors in Russia, as well as for entrepreneurs who aim to import substitutes for the goods and services of departing companies.