Evaluation of losses in the efficiency for Russian companies due to the foreign IT vendors withdrawal from the market

Abstract

The current study aims to evaluate losses in the efficiency for Russian firms from the departure of foreign vendors based on data covering the activity of 6 thousand companies over 15 years (2007—2021). Modeling within the production function approach revealed that Russian firms, on average, are approximately equally dependent on domestic and foreign digital products, that indicates a moderate level of risk. At the same time, the influence is very heterogeneous. Foreign products have a non-linear (decreasing) effect, while Russian products have a linear impact. The returns to IT and the risk of loss in the efficiency vary greatly over time and across industries. Summarizing different results, we assume that the Russian economy could maintain efficiency in the short term; however, the departure of foreign vendors creates significant threats to its long-term development.