Following the Russian invasion of Ukraine last year, just 8.5 per cent of Western businesses operating in Russia have actually left, despite many announcing their departure from the country.
While Western companies like McDonald’s, Ikea, and other high-profile brands have sold off or are in the process of selling off their operations in Russia following the invasion of Ukraine and the subsequent sanctions enacted against Moscow, such companies are in a minority.
A report authored by economics professor Simon Evenett of the University of St Gallen in Switzerland and Niccolò Pisani, Professor of Strategy and International Business at the IMD Business School, says just 120 of the 1,400 Western-based companies they examined had left the Russian market, Yle reports.
“Our research results repeat a pattern familiar from history,” Professor Evenett said. “When companies are pressured to voluntarily leave a country in geopolitical conflict, we typically see few exits. The same thing happened in apartheid-era South Africa.”
According to Yle, part of the reason for the phenomenon could be explained by the fact that the Russian government has made it harder for companies to divest from Russia.
Energy corporation Fortum, for example, has stated it is looking to leave Russia but requires approval by the Russian government and possibly President Vladimir Putin himself.
Last year, reports also claimed that Russia was also threatening to seize the assets of companies that halted their operations.
Other companies, meanwhile, have largely ignored the war and resumed business as usual in Russia.
Jaana Rekolainen, CEO of the East Cham Chamber of Commerce in Helsinki, explained that “[t]here are differences in attitudes, and each company assesses the situation from its own perspective.”
“In some of our European competitor countries, companies take a more business-oriented approach to the issue. There is no desire to give up a profitable business,” Rekolainen said.
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