Passive, Aggressive or Creative? Adjustment Strategies of Companies Affected by Sanctions

Beata Stępień , Patrick M. Weber

Abstract

The probability of sanctions’ effectiveness increases not only due to their severity for the target country’s economy but is also a function of adherence to their principles by enterprises from senders’ countries. Sanctions avoidance and increasing investments in the target country (the observed behavior of many companies facing the European Union (EU) sanctions against Russia which were imposed in 2014) mitigate the impact of these restrictive measures. In this chapter we show (by analyzing adaptation strategies of EU enterprises affected by sanctions imposed on Russia by EU) how particular types of strategies affect the effectiveness of sanctions and what factors determine the choice of their respective behavior. We draw our conclusions from the online survey of more than 1,000 responses from British, French, German, Italian, and Polish enterprises. We find that while administrative burdens make conformance to sanctions more likely, market dependency and non-tangible assets in the target country induce strategies that challenge sanction policies. We conclude that the EU–Russian sanctions dispute incentivizes European companies to increase their engagement in Russia. These so-called defiance strategies diminish the real economic effect of the sanctions and generate a new equilibrium which outlasts the lifting of these restrictive measures and has negative long-term political implications.
Author Beata Stępień (WGM / KZM)
Beata Stępień,,
- Department of International Management
, Patrick M. Weber
Patrick M. Weber,,
-
Pages131-156
Publication size in sheets1.25
Book Van Tulder Rob , Verbeke Alain, Jankowska Barbara (eds.): International Business in a VUCA World: The Changing Role of States and Firms, Progress in International Business Research, vol. 14, 2020, Emerald Publishing, ISBN 978-1-83867-256-0, [978-1-83867-255-3], 519 p., DOI:10.1108/S1745-8862201914
Keywords in Polishsankcje; unikanie, dostosowanie się do sankcji, strategie dostosowawcze wobec sankcji; efektywność sankcji
Keywords in Englishsanctions; sanctions compliance; sanctions avoidance; defiance strategies; business strategies under sanctions; sanctions effectiveness
DOIDOI:10.1108/S1745-886220190000014009
URL https://www.emerald.com/insight/content/doi/10.1108/S1745-886220190000014009/full/html
Languageen angielski
Score (nominal)20
Score sourcepublisherList
ScoreMinisterial score = 20.0, 24-04-2020, MonographChapterAuthor
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UwagiFirst online: 2019-10-21
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