THE IMPACT OF SANCTIONS ON THE COMPANY VALUE

A successful business requires favorable conditions both in the internal and external environment. Due to political conflicts, a number of countries imposed economic sanctions on Russia, which had a serious impact on the Russian oil and gas industry. The importance of the state of the country’s oil and gas industry was justified by the fact that oil and gas revenues account for a significant part of the budget revenues of the Russian Federation. That is why the oil and gas industry occupies a significant position in the Russian economy; therefore, any price change in this segment strongly affects the country’s GDP and requires constant support for the cost of oil. In modern business conditions, which are characterized by constant changes in the market environment and the instability of the political situation, the question arises of the organization of work on managing the market value of a non‑gas company. An important role in building an effective company value management system is played by an understanding of which factors have a decisive influence on its value, as well as identification of the impact of sectoral sanctions. A number of macro‑ and microfactors were determined on the basis of a literature review. To analyze the influence of factors in the article, a series of regression models was constructed for three key companies in the oil and gas industry. As a result, the most significant factors affecting the value of the company were identified. The study also assessed the impact of sanctions on the value of Russian oil and gas companies. For two of the three companies, the fact was revealed that market capitalization is linearly dependent on the presence/absence of sanctions. This fact justifies the relevance of assessing the dependence of companies on sanctions and allows us to conclude that sanctions are significant for the industry and for the welfare of the country as a whole.

company value, valuation, market capitalization, regression model, political instability, sanctions, macroand microeconomic factors, oil and gas industry, Rosneft PJSC, LUKOIL PJSC, Gazprom Neft PJSC.

Plotnikova E. V., Pogorelaya P. S. The impact of sanctions on the company value. Business. Education. Law, 2019, no. 4, pp. 237–243. DOI: 10.25683/VOLBI.2019.49.458.