How to Identify Foreign Business in Russia and What are the Key Issues of Creating and Keeping a Full List of the Largest Foreign Companies in Russia

Abstract

With the beginning of the Russian invasion of Ukraine, the world began to call on international business to sever business ties with Russia, and at the same time, some countries began to impose sanctions against entire sectors of the Russian economy. In this paper, we propose a methodological approach used by the Kyiv School of Economics to assess what foreign business in the Russian Federation is, how to correctly calculate its share in GDP, and how, in our opinion, the behavior of international companies should be assessed. According to our calculations, about ~1,400 companies with total revenue of more than USD 300 billion in 2021 (about 17% of nominal GDP) had direct business in the Russian Federation. Almost a year after the invasion, we estimate that companies accounting for about 16% of revenue have already sold their businesses, and about half plan to do so in the near future. At the same time, we understand that companies may maintain explicit or implicit trade ties, closely monitor what we are going to do in the future and the assessment of their impact (these trade relations) on the economy will still need to be developed.

Keywords: Russian invasion, international business in Russia, sever business ties, sanctions, sectors, Russian economy, methodological approach, Kyiv School of Economics, KSE, foreign business, share in GDP, behavior, international companies, revenue, nominal GDP, direct business, trade ties, impact, economy