Courtesy of Jeffrey Sonnenfeld

Yale School of Management professor Jeffrey Sonnenfeld is ranked higher on the Russian government’s list of sanctioned individuals than U.S. Senator Mitch McConnell.  

The reason behind it: Sonnenfeld has reported in detail on the extent of economic sanctions and corporate boycotts against the Russian economy.

Sonnenfeld and Steven Tian ’20, head of research at the Chief Executive Leadership Institute, said they never expected their now-viral list of 1,100 companies to provoke such a strong response from the Kremlin. Still, they are doubling down on their efforts to report and speak out on the state of the Russian economy.

“We never expected that the war would last this long,” Sonnenfeld said. “But this invasion and unprovoked attack on Ukraine calls for an urgent economic and business response to the crippling of democratic norms.” 

Their work has led United States Treasury Secretary Janet Yellen ’67, the British Cabinet, representatives from the International Monetary Fund and other senior government officials to request briefings with the team. 

Sonnenfeld’s work also led to Ukrainian President Volodymyr Zelensky speaking off-script during Sonnenfeld’s CEO summit in July. The event was the only time since the invasion began that Zelensky had spoken off-script to officials and business leaders.

“It’s been an honor and the biggest highlight of my time at Yale to be able to stand in these places with some of the most distinguished leaders of our time and have them really interested and willing to listen to a bunch of college students,” said Yash Bhansali ‘23, a member of the research team specializing in financial markets. 

Shortly after Russia began its invasion of Ukraine in February, Sonnenfeld and Tian began to catalog American businesses that pulled out of Russia. Their list grew from around 100 companies in February to almost 1,100 companies as of September, and quickly went viral on American media. 

From their original system of a simple yes or no as to whether companies were leaving Russia, the team of Yale College and SOM students developed a rubric that grades companies on their ties to Russia. Companies can receive an A if they have liquidated all assets and ceased operations, while an F grade indicates the firm is entrenching its business interests in the country. 

Additionally, Steven Zaslavsky SOM ’22 and Bhansali compiled data on the financial state of the companies the team tracked. They began to see a clear trend emerging that companies who exited the Russian market saw an increase in their stock prices and also fared better in bonds and equities markets, while companies who remained in Russia saw their stock prices fall. The team’s work was published in May. 

“For most of my career, I have been telling CEOs that corporate responsibility is important and will pay off in the long term,” Sonnenfeld said. “So, to be able to publish this paper and show definitively that there are tangible economic benefits past just symbolic benefits that many people in the business world don’t value was really important.”

After publishing their paper in May, the team began to consider further action they could take, and addressed propaganda coming out of the Kremlin that they thought was duping journalists and government officials into saying sanctions were not an effective mechanism to combat Russia’s aggression. 

“Russia’s propaganda mills have been very effective at spinning out information and data that shows that sanctions and economic boycotts are not affecting their economy,” said Robert Hormats, former Under Secretary of State and an advisor on the project. “Sonnenfeld and team are helping push back against a narrative that the Russians are crafting which some journalists and people in government are starting to accept.” 

To continue building on their fact-checking work, Sonnenfeld investigated the effects of sanctions on the Russian economy — specifically within the realm of energy and agriculture. Russia’s economy is heavily dependent on energy, particularly gas or oil distributed through pipelines to western Europe, Sonnenfeld said.

According to Sonnenfeld, as the war has continued and sanctions have become more stringent, his team has begun to track and push back against propaganda where Russia claimed it could move the oil and natural gas to other consumers, such as China and India. Since the oil and natural gas are distributed through permanent pipelines, this is incorrect, Sonnenfeld said.

Sonnenfeld and his team similarly tracked other pieces of disinformation that Russia put out and compiled it into a paper, “Business Retreats and Sanctions Are Crippling the Russian Economy,” that was published in late July. 

That paper has since become one of the top three most downloaded articles on the Social Science Research Network, and led to invitations from the State Department to address foreign press associations, as well as to brief officials at the Bureau of Economic Affairs. 

“Business Retreats and Sanctions Are Crippling the Russian Economy” has been viewed by 290,000 users. 

 

YASH ROY
Yash Roy covers City hall, local politics, and the state for the News. He is also a Production & Design editor. Originally from Princeton, New Jersey, he is a sophomore in Timothy Dwight College double majoring in Economics and Americans Studies.