Performance of Russian manufacturing subsidiaries of foreign multinational corporations opened in 2012-2016

摘要

This paper reports on the performance dynamics of Russian manufacturing subsidiaries of foreign multinational corporations that were established in 2012-2016. We collected balance sheets, annual income statements and other annual reports of a representative sample of the general population of manufacturing plants opened in Russia by foreign multinational corporations in 2012-2016. We performed an analysis of the major business indicators, such as exit rate, sales dynamics and financial results. We found that showing a positive gross profit was a relatively easy task and the majority of companies achieved this in the year of their official opening or shortly afterward. However, the majority of manufacturing plants opened in 2012-2014 demonstrated negative net profitability until 2016. We explained the massive shift to profitability in 2016 by the improvement in gross margins, measures taken to save "additional costs," as well as the changes in the legal framework of foreign subsidiaries' activities in Russia and the subsequent amendment of financial policies applied to Russian subsidiaries by their corporate parents. In general, multinational corporations demonstrated a high ability to operate under conditions of the high market and institutional uncertainty and strategic flexibility in managing their newly established Russian industrial assets.