The Economic Costs of the Russia-Ukraine War: A Synthetic Control Study of (Lost) Entrepreneurship
26 Pages Posted: 9 Mar 2023
There are 2 versions of this paper
The Economic Costs of the Russia-Ukraine War: A Synthetic Control Study of (Lost) Entrepreneurship
War and Entrepreneurship: A Synthetic Control Study of the Russia-Ukraine Conflict
Date Written: March 5, 2023
Abstract
This synthetic control study quantifies the economic costs of the Russo-Ukrainian war in terms of foregone entrepreneurial activity in both countries since the invasion of Crimea in 2014. Relative to its synthetic counterfactual, Ukraine’s number of self-employed dropped by 675,000, corresponding to a relative loss of 20%. The number of Ukrainian SMEs temporarily dropped by 71,000 (14%) and recovered within five years of the conflict. In contrast, Russia had lost more than 1.4 million SMEs (42%) five years into the conflict. The disappearance of Russian SMEs is driven by both fewer new businesses created and more existing business closures.
Keywords: Entrepreneurship, war, Russia-Ukraine conflict
JEL Classification: D74, L26, N44, O17
Suggested Citation: Suggested Citation