Oleg Gurshev

Thesis topic: "Essays on trade and foreign direct investment"

Supervisor:  Andrzej Cieslik

Job market paper:

• From Russia with love: theory and empirical evidence on profit shifting and capital flight across borders

Abstract:   This paper uses unique data on majority-owned foreign manufacturing affiliates operating in Russia to study the impact of 2014 economic sanctions across profit shifting and real multinational firms. We find that profitability of Cyprus-owned affiliates operating in Russia between 2012-2019 has been largely unaffected by the introduction of external financial frictions. In fact, we report that, among profitable firms, the recorded profitability of Cyprus affiliates has increased between 18% and 40% after 2014. For the complete sample of identified profit shifting firms, we find that the recorded profitability has risen between 12.6% and 17.8%. Further, our results indicate that real affiliates have permanently withdrawn a notable portion of fixed assets from the economy. We also do not find any statistical evidence regarding the impact of counter-sanctions on profitability or fixed assets of real firms connected to Russia's trade embargo on agricultural products. To reconcile empirical findings on profitability of Cyprus firms, we develop a modification of the profit shifting model from Hines and Rice (1994) and offer a plausible explanation as to why profit shifting firms that perform round-trip investment may experience an increase in profits under the presence of external financial frictions.

Peer-reviewed publications:

• Relative factor endowments, foreign direct investment and tax planning of multinational firms: an empirical investigation into cross-country data. Journal of Baltic Economics (2023). (with A. Cieślik)

• Foreign direct investment and international trade across the former Soviet economies: What do we know after 30 years of research?. Journal of Economics and Management (2023). 

• Trade policies in Central Asia after EUEA enlargement and after Russian WTO accession: Regionalism and integration into the world economy revisited. Eurasian Geography and Economics (2023). (with A. Cieślik)

• Factor Endowments, Economic Integration, Sanctions, and Offshores: Evidence from Inward FDI in Russia. Comparative Economic Studies (2022). (with A. Cieślik)

• Friends with or without benefits? An empirical review of trade integration between some of the post-Soviet economies. Eurasian Econ Rev (2022) (with A. Cieślik)

• Between the Eurozone crisis and the Brexit: the decade of British outward FDI into Europe. Empir Econ (2021). (with Cieślik A., Hamza S.)

• Factor Endowments, Economic Integration, Round-Tripping, and Inward FDI: Evidence from the Baltic economies. J. Risk Financial Manag, 14(8), 348, 2021. [Special Issue on FDI and Trade] (with Cieślik A.)

• BITs, colony ties, and offshore centers: the case of United Kingdom outward FDI.  Journal of Economic Integration, 36(2), 2021. (with Hamza S.)

• Determinants of inward foreign direct investment in Ukraine: Does political stability matter?. International Journal of Management and Economics , 56(3), 2020. (with Cieślik A.)

• What determines foreign direct investment in Russia?. Central European Economic Journal,  6(1), 2019.

Contact:

oleggurshev@gmail.com

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