Solely 8.5% of western firms have left Russia – examine

Regardless of widespread outrage over Moscow’s struggle in Ukraine, few Western firms left Russiain keeping with a Swiss examine.

Researchers from the College of St. Gallen and the IMD Institute in Lausanne have examined what number of firms based mostly within the European Union and G7 nations have really cut up from Russia for the reason that full-scale invasion of Ukraine started final February.

Their findings present “a really restricted withdrawal of EU and G7 firms from Russia and problem the narrative that there’s a main exodus of Western firms exiting the market,” the College of St. Gallen stated in a press release on Thursday .

“Certainly, many firms headquartered in these nations have resisted stress from governments, media and NGOs to go away Russia for the reason that invasion of Ukraine.”

Solely 120 firms left Russia

The examine, launched final month by the net Social Science Analysis Community (SSRN) – a writer of “preprint” research that haven’t been peer-reviewed – confirmed that lower than 10 % of the EU and G7 -Firms with Russian working subsidiaries had divested them.

When Moscow launched its invasion, 1,404 firms based mostly within the EU and G7 counted a complete of two,405 branches lively in Russiaconfirmed the examine.

By the top of November, solely 120, or about 8.5 %, of these firms had divested at the least one subsidiary in Russia, examine authors Niccolo Pisani and Simon Evenett discovered.

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There have been extra confirmed exits from firms headquartered in the USA than from firms based mostly in Europe and Japan.

However even in the USA, lower than 18 % of US subsidiaries working in Russia have been absolutely divested for the reason that invasion started, the examine confirmed.

In distinction, 15 % of Japanese firms and solely 8.3 % of EU firms have parted methods with Russia, it stated.

In keeping with the examine, 19.5 % of those that have stored their Russian branches are in German possession and 12.4 % in US possession.

Decrease profitability and bigger workforces

The analysis additionally confirmed that the exiting Western companies accounted for simply 6.5 % of the overall pre-tax revenue of EU and G7 companies with lively operations in Russia.

They now make up 15.3 % of the overall variety of workers in such firms in Russia.

This means that, on common, the leaving firms are likely to have decrease profitability and bigger workforces than the businesses that stay in Russia, the examine discovered.

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These findings, the college stated, “name into query the willingness of Western firms to decouple from economies that their governments now view as geopolitical rivals.”