Factors influencing the multinational banks’ decisions to curtail operations in russia: Does ESG matter?

Rohov, H.; Kolodiziev, O.; Yehorycheva, S.; Krupka, I.; Zaplatynskyi, M.

Публікація:
Factors influencing the multinational banks’ decisions to curtail operations in russia: Does ESG matter?

dc.contributor.author	Rohov, H.
dc.contributor.author	Kolodiziev, O.
dc.contributor.author	Yehorycheva, S.
dc.contributor.author	Krupka, I.
dc.contributor.author	Zaplatynskyi, M.
dc.date.accessioned	2024-03-07T22:18:50Z
dc.date.available	2024-03-07T22:18:50Z
dc.date.issued	2024
dc.description.abstract	The paper is devoted to an under-researched topic of the international business community's reaction to Russia's armed aggression against Ukraine. It aims to evaluate how such factors as G7 and EU financial sanctions, institutional pressure, ESG ratings, and asset value of multinational banks in Russia influence their decisions to reduce activities in the invading country. The study was conducted based on the Yale CELI database of companies leaving and staying in Russia, using the classification tree method. The results of this study show that none of the banks headquartered in G7 and EU member states that had no or relatively little assets in Russia before the invasion are doing business there on a pre-war scale. Unlike banks headquartered in other countries, most of them either curtailed their presence in that market or exited. This indicates that financial sanctions imposed by G7 and EU member states and institutional pressure on banks in these countries to withdraw from the Russian market have proven effective to a certain extent. However, these factors do not meaningfully influence the business of multinational banks with significant assets in Russia. The study has not confirmed the hypothesis that a bank with higher ESG ratings is more likely to curtail its operations in the market of an aggressor country and withdraw. However, nearly all banks that scaled back significant activities or even pulled out of Russia have better ESG indicators than the industry average. The study results suggest the feasibility of improving the methodologies of ESG rating providers for accurately measuring business reactions to aggression and war crimes.
dc.identifier.citation	Factors influencing the multinational banks’ decisions to curtail operations in russia: Does ESG matter? / H. Rohov, O. Kolodiziev, S. Yehorycheva, I. Krupka, M. Zaplatynskyi // Banks and Bank Systems, 19(1), 135-147.
dc.identifier.issn	ISSN 1991-7074 (online)
dc.identifier.uri	https://openarchive.nure.ua/handle/document/25963
dc.language.iso	en
dc.subject	banks
dc.subject	asset value
dc.subject	war and business
dc.subject	sanctions
dc.subject	market exit
dc.subject	ESG
dc.subject	SDG Impact rating
dc.title	Factors influencing the multinational banks’ decisions to curtail operations in russia: Does ESG matter?
dc.type	Article
dspace.entity.type	Publication