Fedorova E.A.National Research University Higher School of Economics, Financial University under Government of Russian Federation, Moscow, Russian Federation ecolena@mail.ru
Importance Instability in the financial market and the embargo resulted in financial stress, scarce raw materials or reduced sales capacity of domestic industries. To make adequate investment decisions, it is crucial to evaluate the risk of sanctions for critical economic sectors. Objectives It is incorrect to consider the assessment of the impact of sanctions on the Russian economy only in the context of individual economic units, like industries or regions. The cumulative effect is possible to measure only by considering the changes in the entire processing chain, taking into account export-import operations. Methods One of the most effective methods for assessment is the regression analysis based on historical data through introducing artificial variables to consider the specifics of each individual model. Results Imports from Germany, Italy and Korea have the strongest effect on domestic enterprises' revenues operating in the trade industry. The findings show that the impact of exports and imports of the countries, which imposed sanctions, and the friendly countries (China) may differ in terms of direction and magnitude. For instance, if Germany reduces its export to our country by 10%, the revenue in the analyzed industries will fall by 3.4% per year. Conclusions The sanctions endanger the implementation of many projects that are significant for economic development, and, in the short term, they may lead to deteriorated performance. In the long run, the economy will be able to rely on the assistance of developing countries, but inevitably will suffer from the lack of innovation and state-of-the-art technologies.
Keywords: sanctions, export, import, industry specifics, spillover effect
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