Bottom line: the 2014 sanctions work as designed, but maybe not within a timeframe that matters for Russian leaders. Short-termism may even have increased oil revenues right when the government needed to fund conflict. Understanding how organizations adapt is key to designing sanctions that work.
What drives short-termism? By raising the cost of capital and restricting access to technology, input sanctions devalue long-term investments relative to current production. But this means impacts could take years or decades to materialize.
I find that sanctioned firms become short-termist, increasing current production while cutting exploration in new fields. While it might seem like sanctions failed because Russian oil production didn't collapse, companies were sacrificing long-term productive capacity for short-run revenues.
In 2014, several Russian oil companies were hit with sanctions that restricted access to Western financing and oilfield technologies. Other companies weren't sanctioned, creating a natural experiment.
I had a great time discussing my research on how Russian oil companies adapt to sanctions for the Policy Implications Podcast! New working paper here: ekatovich.github.io/files/Katovi...
📢 Out now in the ❄️January 2026 issue❄️ of #JAERE! 📢
"Timing Is Everything: Labor Market Winners and Losers During Boom-Bust Cycles" by Erik Katovich ( @ekatovich.bsky.social ), Dominic Parker and Steven Poelhekke.
Read it here: buff.ly/wo8UyJV
📈📉 #Econsky
🏭 Just accepted in #JAERE! 🏭
"Timing is Everything: Labor Market Winners and Losers during Boom-Bust Cycles" by Erik Katovich ( @ekatovich.bsky.social ), Dominic Parker, and Steven Poelhekke.
Read it here: buff.ly/C2ArZ2M
📈📉 #Econsky
