BOFIT Discussion Paper: Who cares about sanctions? Observations from annual reports of European firms

New BOFIT Discussion Paper 5/2021

Davydov, Denis; Sihvonen, Jukka; Solanko, Laura
Who cares about sanctions? Observations from annual reports of European firms

Abstract:
This paper uses textual analysis to examine how European corporations assess sanctions in their annual reports. Using observations from a panel of almost 11,500 corporate annual reports from 2014–2017, we document significant cross-country variation in how firms perceive Russia-related sanctions. Even after controlling for firm-level characteristics, cross-country differences remain for sentiments about sanctions and contexts in which sanctions are mentioned. We also examine the role of macroeconomic linkages in explaining these differences. We show that the Russia’s inward and outward FDI stocks and high levels of imports and exports with Russia only partially explain the cross-country variation, leaving a nontrivial share of variation unexplained.

New BOFIT Discussion Papers are available online in the Bank of Finland's institutional repository: 

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Sivuston ylläpidosta vastaa Aalto-yliopiston kauppakorkeakoulun Kansainvälisten markkinoiden tutkimuskeskus CEMAT (Center for Markets in Transition)

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Aalto-yliopisto
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