LOS ANGELES (KNX) – As Russia continues it’s invasion of Ukraine, many companies are closing up shop in Russia, to show their disapproval of the country's actions against Ukrainians.
McDonalds, Starbucks, Shell, and even Disney are among the many big-name companies pausing business in Russia. But Daniel Treisman, a political science professor at UCLA and Russian politics and economics expert, said some businesses are taking different approaches.
“Some of the companies are not so much liquidating their partnerships and their involvement as just putting it on hold,” he told KNX In Depth.
“They’re ceasing operations for the moment and I imagine they could go back quickly if this thing ever gets resolved. But for others, there are big transaction costs in getting out than there would be in getting back in so it looks pretty serious in the medium run.”
Either way, Treisman said the impact of the big companies leaving will be felt both by Russian citizens.
“People in the cities who have been living basically a middle class life quite connected to the world have been consuming these international products, eating at McDonalds, buying furniture at IKEA, and it’s quite traumatic for them to be cut off from these international brands,” he explained on KNX In Depth.
“But also the people outside big cities, in the industrial heartland they’re going to feel this too, (because) their factories are going to have to stop producing, because they can’t get inputs – computer chips, components. So the whole economy, it’s staggering at this point.”
Listen to Treisman’s full interview in the audio above.
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