Abstract : The U.S. has imposed several sanctions on Russia’s economy since 2014 mainly due to the war against Ukraine, which has affected not only its macroeconomic variables, but several businesses’ decisions to trade with Russia. Despite the severity of the amends on the violations, several western businesses continue to trade with Russia and have stayed in the country. Interestingly, some of European and American companies are still operating in Russia despite the sanctions and threats to their businesses. The question that remains to be answered is what are the factors that affect businesses’ decisions to adhere or decline the U.S. sanctions? Those drivers are important from the geopolitical perspective as they can neutralize the adverse effects of sanctions on Russia’s economy. The goal of this paper is twofold. First, we analyze the effects of sanctions on macroeconomic variables second, we try to shed lights on the drivers of businesses’ decisions to stay in or leave Russia at the micro level. Using a Tobit model, we relate businesses’ decisions to variables such as property rights, corruption perception index, Global Sanction Index (GSI), and Global Militarization Index (GMI) in the origin country to find out whether those are important variables in their decisions.

Keyword : Corruption perception index, geopolitical conflict, global militarization index (GMI), global sanction index (GSI), Tobit model, yuanization.