CEU Electronic Theses and Dissertations, 2023
| Author | Khatoon, Irfana |
|---|---|
| Title | Examining the Impact of 2014 International Sanctions on Russian Foreign Direct Investment |
| Summary | This study utilizes an Autoregressive Integrated Moving Average (ARIMA) model to conduct an intervention analysis, examining the impact of sanctions imposed on Russia after the annexation of Crimea on Russian Foreign Direct Investment (FDI). Its objective is to assess the influence of sanctions on FDI inflows in three key industries: agri-mining, manufacturing, and services. Data for the study is obtained from several sources, including the Bank of Russia, UNCTAD, the Global Sanction Database, the World Bank, and Trading Economics. The research reveals that economic sanctions imposed in 2014 had a negative impact on FDI inflows in Russia's major industries. However, as more sanctions were imposed over time, a positive relationship emerged between the number of sanctions and FDI. The actual change in FDI after the 2014 sanctions differed from expectations. Particularly, the tertiary industry experienced a significant decline in FDI compared to pre-2014 levels. This indicates that despite Crimea's annexation and stricter sanctions, Russian industries still attracted foreign investment, albeit at a slower pace. Based on the opportunity and risk aversion arguments, it is concluded that the risk associated with sanctions led to reduced investment in Russia in 2014. However, this decline in investment created an opportunity for non-sanctioning countries to increase their investments in Russia. As a result, despite the increased number of sanctions, the inflow of FDI into Russia continued to increase after 2014. Thus, these arguments help unravel the puzzle of Russia's FDI and economic sanctions relationship. |
| Supervisor | Ratfai, Attila |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2023/khatoon_irfana.pdf |
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