“Government response on russian war in Ukraine: Relocating business”

The russian war in Ukraine replaced not only millions of people but also businesses in the safer regions of Ukraine. The study aims to identify regional stakeholders’ emergency responses in reaction to the russian war in Ukraine associated with business relocations and their impact on the host region. Employing qualitative research methods, including focus group discussions and in-depth semi-structured interviews with 25 informants (representatives of departments of economic development of regional authorities and administrators of regional development agencies), the study was conducted between March and May 2023. The findings reveal a diverse range of relocation strategies, with a significant inclination toward safer western and central regions of Ukraine, which accounted for more than 70% of displaced businesses. The notable share of relocated companies are wholesale and retail trade companies and the processing industry companies – 40% and 32%, respectively. It is assumed that not capital-intensive companies were relocated first. The support from regional stakeholders played a crucial role in mitigating business challenges related to relocation (communication difficulties, market loss, supply chain disruptions, and employee relocation issues, providing comprehensive assistance, and facilitating integration into the new socio-economic environment). The study acknowledges potential biases in responses and emphasizes the importance of correctly interpreting results. The study results are helpful for policy-making regarding regional development and the post-war rebuilding of Ukraine.


INTRODUCTION
In 2022, Ukraine faced unprecedented challenges due to the Russian military invasion.Businesses in the country had to contend with shelling and missile attacks, leading to severe losses and uncertainty.Many Ukrainian businesses decided to move to safer regions within Ukraine to protect their assets and people.
Ukrainian enterprises adopted relocation strategies to secure their future in response to this turmoil.Understanding these strategies, their effects on host regions, and the role of regional stakeholders is vital for shaping policies in these dynamic circumstances.
Demonstrating solidarity in such a difficult circumstance, different representatives of the regional stakeholders helped organize the relocation process.Assessing the effectiveness of these responses is critical for developing an emergency guide of actions during force major (war conflicts, disasters, etc.) and post-war rebuilding actions.
All support initiatives can be divided into government initiatives (national-level programs and common regional authorities and regional development agencies), initiatives of local communities (NGOs, volunteers, and individuals), and foreign donors.Identifying challenges during relocation business both from the host regional ecosystem and displaced business are needed to develop specific solutions for their further development.One of such obstacle is poor communication between businesses and government, which reduces the effectiveness of the support programs.Identifying barriers faced by relocated businesses is crucial for the effectiveness of future support programs.Additionally, examining host regions' issues will inform comprehensive regional development policies in restoration infrastructure and energy systems.

LITERATURE REVIEW
Business relocation is a strategic decision firms undertake for different reasons, influenced by various economic, geographical, policy, force majeure, and disaster-related factors.Bao et al. (2022) explore the impact of business relocation on the broader community, suggesting that it affects businesses and households.The importance of considering geographical factors in business relocation was highlighted by Zhou et al. (2016).Mammadov et al. (2023) suggested credit guarantee schemes supporting business growth after relocation.Non-direct support of relocated businesses by the government is described by Riadinska et al. (2022), where the attention is drawn to changing legislation for credit activities of the banks to aid displaced enterprises.Couch et al. (2011) investigate the cyclical nature of business relocations and their impact on employees.Koster  Military conflicts significantly affect the life of the country as a whole due to the displacement of people (Alekseyenko et al., 2021) The literature review on business relocation demonstrates its multifaceted nature, with factors ranging from economic conditions and environmental regulations (e.g., disaster-related factors) to human capital and political considerations.The ongoing russian war invasion in Ukraine has prompted businesses to relocate as they grapple with the challenges and uncertainties posed by the military conflict.Understanding the main features and motivations behind these relocations is crucial for policymakers, researchers, and businesses seeking to navigate the complex landscape of business relocation in a conflict zone.
The objective of this study is to explore how the emergency actions taken by regional stakeholders in response to the russian war in Ukraine have played a crucial role in business relocations and how it impacted the host regions.

METHODS
Considering the unique nature of the target group and the challenges in obtaining valid information, qualitative research methods were selected to collect sociological data, specifically focus group discussions and in-depth semi-structured interviews.
A questionnaire (interview guide) outlining essential questions for discussion was chosen as the research instrument.The structure of the guide consisted of several information sections: experience of collaborating with representatives of relocated businesses, support programs, and economic impact, donors and sponsors, and general characteristics of displaced businesses.
Representatives of relocated businesses constitute a novel social group within Ukrainian society, which has found itself amidst social turbulence and is significantly influenced by various social processes and phenomena in the relocation area.Experts from local and regional authorities provided the primary support, including legal, financial, and social assistance for these displaced businesses.Over time, these efforts have accumulated the necessary experience to elucidate the peculiarities of adaptation for relocated businesses within the new socio-economic environment.
The empirical foundation of this study consists of the results obtained from a series of in-depth interviews conducted with managers, representatives of local governments, regional military administrations, and regional development agencies (10 interviews), as well as focus group discussions (2 focus groups).These interviews and discussions were facilitated using cloud-based communication services.The responses provided by the informants were recorded using video and audio recording equipment.Empirical data were collected between March and May 2023, involving 25 informants.
It is essential to consider that when generalizing individual expert opinions, the correct interpre-tation of the results is crucial.It is also acknowledged that during the survey, there might be instances of "social desirability" and "asymmetry of attribution," where respondents provide socially accepted answers within a specific community or social group.Such "heightened criticism" could be encountered when experts discussed their own perspectives on the functioning of relocated businesses within the region of operation.These research indicators are projective and predictive, providing descriptive trend information.

Overview of relocation trends during full-scale invasion
Russian full-scale invasion in February 2022 forced Ukrainian entrepreneurs to adopt a rushed decision to save their employees and production facilities and relocate to safer, mainly western and central regions.
The highest business relocation rates were observed in the first 5 months of the full-scale war when 661 companies were relocated with the Government's relocation program.Later, the growth rate decreased.As of March 2023, according to the Ministry of Economy (2023), 800 companies had been relocated with the government's assistance.
Figure 1 shows the number of relocated companies under the Government Relocation Program.However, the statistics about the total number of relocated companies, including those who moved  to other regions using their own resources or with the help of regional authorities, are missing.This data gap complicates the comprehensive exploratory analysis of the business relocation process in Ukraine during the full-scale war.
After more than a year, the relocation process has slowed down significantly.In some regions, the number of relocated companies has decreased -companies return to their home regions.However, they also create branches in new regions where they have relocated, which means business expansion.
Based on collected region-level data and interview results, four main relocation strategies can be identified: 1. Relocation within the region.For example, 5 companies from the occupied territories of Zaporizhzhia Oblast were relocated to the city of Zaporizhzhia.This strategy is the least safe due to the security risks but is expected due to historically low levels of population mobility.
2. Relocation to neighboring or relatively safer central regions without intensive warfare.For example, 41 companies, mostly from Kharkiv, Donetsk, and Luhansk Oblasts, relocated to the Poltava and Cherkasy Oblasts.
3. Relocation to the western regions.This is the safest strategy chosen by most relocated businesses.At the same time, the largest share of businesses relocated to the regions bordering the EU -Lviv and Zakarpattia -almost 40% of the total number of relocated companies.However, significantly fewer companies relocated to western regions close to the Belarusian border (Rivne and Volyn Oblasts) due to security risks.
4. Relocation abroad.This is the most radical strategy and, in fact, means starting a business almost from scratch, even if it is possible to relocate employees and equipment.
Some companies also have chosen the option of business re-registration in comparatively safe regions instead of physical relocation.The main reasons are the impossibility of production facilities relocation, especially in capital-intensive industries (machinery and ship repair companies), and due to the rapid occupation of the territory (for example, Kherson Oblast).Such a strategy indicates an intention to operate in the Ukrainian legal framework (including tax payments) if a company's location is occupied.

Analyzing interviews on business relocation during full-scale invasion
Appendices A-E summarize the informants' responses to the current issues of relocated business.The synthesis of informants' answers facilitated the visualization and summarization of the survey results.This process involved aggregating and interpreting the responses, enabling a comprehensive understanding of the collective perspectives provided by the informants.
Considering the survey results, it is reasonable to divide the block of questions 'Relocation issues' into two key questions: 1) What were the relocation difficulties for the business?2) What were the difficulties of relocation for regional authorities?
The results showed a significant variation in difficulties for both relocated businesses and regional authorities.
According to the results, the challenges associated with business relocation are quite diverse, and it is appropriate to divide them according to the following classification criteria: 1) by nature; 2) by subject; 3) by stages of relocation (Figure 2).
Respondents mentioned communication difficulties, loss of markets, problems in supply chains, sales, and the quality of premises provided.There were also difficulties in relocating employees and interacting with government agencies.Notably, the respondents emphasized the importance of relocators understanding the geographical and economic aspects of the host region, which they had difficulty with.The results generally indicate specific regional, subjective, and operational relocation difficulties.
The analysis expands the taxonomy of relocation difficulties in wartime.In particular, general and specific relocation difficulties for businesses were identified (Figure 3).
On the other hand, regional authorities also faced significant difficulties, the classification of which is presented in Figure 4.
Most informants emphasized the importance of active support for relocated businesses by regional authorities as an essential element of the region's Long process of booking highly qualified specialists economic development strategy under martial law.Regional authorities emphasized their own pivotal role in creating a favorable business ecosystem for relocated businesses in their region.In most cases, this involved providing financial support, facilitating partnerships with local businesses and institutions, and providing the necessary infrastructure.
Given the results of the interviews, it is advisable to combine the following questions in the block of questions "Support for relocated businesses by regional authorities": 1) How did regional author-ities and potential relocators communicate and coordinate their actions?2) How was the business relocation to the chosen region prepared and organized?3) How was the relocation and logistics of the relocated business carried out? 4) How was the relocated business restored, launched, and supported in the host region?
Regional authorities' support of displaced enterprises is a key factor in the successful relocation process.It has been established that regional au- Lower demand for relocation for non-border and rear (bordering on areas with active hostilities) regions

Absence of budgets for the implementation of local programs to support relocated businesses
Insufficient role of regional development agencies in business relocation processes Regional development strategies in certain regions are not adapted to the conditions of martial law thorities actively promote the relocation of new businesses to their regions by providing additional incentives and infrastructure support.This contributes to the development of the business community in the region, creates a favorable atmosphere for investment, and helps to increase the economic potential of the region.The study has shown that support for relocated businesses by regional authorities includes: 1) Communication and coordination of actions between regional authorities and potential relocators; 2) Preparation and organization of business relocation to the selected region; 3) Relocation and logistics of relocated business; 4) Restoration, launch, and support of relocated business activities.
In terms of communication and coordination between regional authorities and potential relocators, various tools are used, such as specialized government web resources, Telegram channels, and Google services, to exchange information with potential relocators.In addition, regional authorities tried to consider each business's individual needs.They provided support at various stages of relocation, which contributed to the successful integration of these businesses in the host regions.
The respondents' answers about preparing and organizing business relocation demonstrated a preference for large cities and oblast centers in relocation processes.Regional authorities assisted in finding and improving living conditions and established communication on these issues with employment centers.Respondents reported organizing systematic meetings with relocated businesses, as well as providing ongoing consulting support and assistance in all aspects of relocation.
At the same time, respondents pointed out the importance of considering the needs of relocated businesses for logistics support and assistance from logistics companies and government agencies.Most respondents named Ukrzaliznytsia, Ukrposhta, and Nova Poshta as key players in logistics support.However, sometimes, individual contacts with logistics companies are used to ensure successful relocation.
According to the respondents, relocated businesses' restoration, launch, and support should include elements such as cooperation with administrative service centers and institutions to obtain the necessary information, support, and permits.Regional authorities emphasize the importance of ensuring that basic requests of relocated businesses are addressed quickly and efficiently.It is also essential to facilitate their successful start by cooperating with local businesses and assisting in finding raw materials and qualified personnel.An equally important aspect emphasized by respondents is the organization of follow-up meetings and interaction between relocated businesses and government agencies, facilitating communication and solving problematic issues.
Initial communication took place only with enterprises that needed state support for relocation (the so-called "official relocation") (Figure 5).Enterprises that did not need and want relocation support and did not take any initiatives to com-

Contacts provided by successfully relocated companies
Organizations that specialize in business relocation municate with regional authorities did not take any initiatives to relocate on their own (the socalled "unofficial relocation").
Potential relocators communicated with regional authorities (Figure 5) through 1) specialized platforms created as part of the nationwide business relocation program "Diia.Business" and "Prozorro.Sales" (official communication); 2) direct contacts between businesses and local governments (informal communication).
Communicating and coordinating potential relocators with regional authorities was divided into specific stages (Figure 6).
Submission of applications for relocation through specialized platforms was coordinated by the Ministry of Economy of Ukraine.Processed applications were displayed online to the authorities of potential host regions, coordinated by the Military State Administrations.Military State Administrations distribute a questionnaire (usually Google form or Telegram) to those wishing to relocate to their region to identify the necessary wishes; coordinators were regional military administrations.Preparation of information for initiative relocation subjects, according to their requests (2-3 days), was coordinated by oblast state administrations, regional development agencies, and local self-government bodies.Feedback to those wishing to relocate regarding their requests and coordination of further actions were taken by oblast state administrations, regional development agencies, and local self-government bodies.
Thus, the process of preparing and organizing the business relocation included: 1. Coordination of positions on the geographical location in the region and the necessary real estate and its preparation; 2. Coordination and organization of employees' and their families' transportation, search for housing, etc; 3. Assistance in obtaining financial assistance (grants, funding programs); 4. Further consulting and information support and organization of a mechanism for cooperation with the relocated business of state agencies (employment centers, educational institutions, medical institutions, tax authorities, law enforcement agencies, etc.).
Most enterprises desired to relocate to large cities and regional centers (or at a distance of 10-15 km from them).Many businesses emphasized the administrative status of the locality (large city, regional center), refusing to consider suitable real estate but more remote settlements with such status.Regional authorities facilitated the restoration of destroyed/damaged real estate that could be used for the needs of relocated businesses.At the same time, regional authorities assisted in transporting employees and their families.Communication was conducted with dormitories, possible places of temporary accommodation (schools, kindergartens, educational institutions), and volunteers Figure 6.Stages of communication and coordination between localized businesses and regional authorities willing to accept the displaced persons.To ensure proper living conditions, housing for internally displaced persons and employees (and their families) was renovated.
It has been established that regional authorities and regional development agencies were engaged in the selection and assistance in the processing of financial assistance: 1) domestic grants; 2) international grant funding; 3) government programs to assist internally displaced persons; 4) concessional lending.Additionally, efforts are being made to raise charitable contributions, donations, and other fees to help relocated businesses and internally displaced persons.The regional authorities provided ongoing informational support to relocated enterprises, including consulting activities to establish cooperation between local government agencies and relocated businesses to facilitate their integration into the region's socio-economic relations (reducing bureaucracy, optimizing and accelerating registration procedures, and helping to establish sales channels).
Regional authorities facilitated the relocation of production facilities, employees, and their families.Such activities were carried out as part of the national relocation program by Ukrzaliznytsia and Ukrposhta.A certain number of companies relocated independently and at their own expense.When Ukrposhta and/or Ukrzaliznytsia were overloaded, regional authorities used their connections with local logistics companies to organize the relocation of businesses and employees.The full structure of logistics support for business relocation in Ukraine can be seen in Figure 7.
To facilitate relocation and logistics, relocated enterprises were offered (before making the final decision on relocation) to move their resources to specially created protected logistics hubs in advance to minimize risks, before making the final decision.
The process of restoring and launching the relocated business involved: 1. Restoration of infrastructure (electricity, water supply, heating and ventilation systems, communications, etc.; repair and adjustment of systems and networks; obtaining the necessary documents and permits); The launch of the business after the recovery is a positive result of the coordinated work of businesses, regional authorities, and regional development agencies.This stage helped to conduct pilot sales, evaluate the first results, and identify problems.Regional development agencies supported relocated businesses by analyzing business plans and the results of their implementation.An essential aspect of the work of regional development agencies was assistance in obtaining grants (search for proposals, formulation of requests, budgeting, and support).In the case of a successful pilot launch, a share of enterprises (with partial relocation of employees/equipment) initiated 100% relocation to the host region.
Regional authorities facilitated communication among relocated businesses through sector-based cooperation, assigning curators to resolve issues promptly.They organized meetings and information sessions and invited relevant authorities to address problems.Separate hotlines were established for quick communication, and meetings with international representatives were held in border regions.In Zakarpattia Oblast, a digital information portal, Dopomoga Zakarpattia, was launched for various support services.Additionally, "Entrepreneurship Support Centers" were established within oblast state administration departments responsible for economic and regional development.The majority of respondents reduced the set of issues related to the impact of relocated enterprises on the ecosystems of host regions to two main aspects: socio-economic and technological impact: 1. Socio-economic impact: • increasing economic activity in the region; • increasing the population of the region due to internally displaced persons increases the consumption of goods and services by businesses in the region; • strengthening of competition with local businesses; • increasing tax revenues to the regional budget; • creating new jobs; • conversing business culture.

Technological impact:
• expanding the region's technological infrastructure; • improving the skills of employees through the exchange of experience; • developing R&D activities.
The findings reveal a diverse range of relocation strategies, with a significant inclination toward safer western and central regions of Ukraine.
The businesses faced multifaceted challenges, including communication difficulties, market loss, supply chain disruptions, and employee relocation issues.However, the support from regional authorities played a crucial role in mitigating these challenges, providing comprehensive assistance, and facilitating integration into the new socio-economic environment.The study acknowledges potential biases in responses and emphasizes the importance of correctly interpreting results.
The challenges faced by relocated businesses and regional authorities are diverse and may change at each stage of relocation.While most scholars do not pay enough attention to logistics in the relocation process, one found that it is one of the most critical stages in conducting research.This study offers valuable insights into governance responses to support relocated businesses, complementing and expanding upon the findings of previous studies.Considering the challenges faced by businesses and regional authorities contributes to a more holistic understanding of this complex phenomenon.
Additionally, it is noted that the prospects for future government decisions include the development of programs to support localized businesses, utilizing both local resources and foreign tranches, and aligning with the broader trend of governments actively engaging in supporting relocated businesses to enhance regional development and economic growth.

CONCLUSION
This study aims to investigate how the emergency actions taken by regional stakeholders in response to the russian war in Ukraine have played a crucial role in business relocations and how it impacted the host regions.
The results demonstrated that despite the government showcasing a proactive approach by rapidly launching the relocation program, the regionally based authorities provided more effective assistance measures, which can be attributed to two factors.Firstly, increasing budget inflows makes local communities highly motivated to attract relocated businesses.Secondly, lower levels of information asymmetry mean that local authorities better understand the region's peculiarities and opportunities, allowing them to suggest tailored solutions that the government may not have sufficient knowledge of.
This suggests that regional authorities and regional development agencies emerged as pivotal players in this emergency response, providing indispensable support in terms of resources, infrastructure, and integration assistance to the displaced businesses.Their active involvement was crucial in creating a conducive environment for businesses to restart their operations.
The analysis shows that regional support for displaced businesses has mostly led to tangible positive outcomes in all the host regions, contributing to economic growth, job creation, and technological advancement.This aligns with the broader objectives of stabilizing the economy and fostering development in the face of adversity.
The resilience demonstrated by Ukrainian businesses, their ability to adapt, and the trend of expanding into new regions even after relocation underscore the effectiveness of both the government's and the local authorities' emergency response.
The experiences and lessons drawn from this emergency response are invaluable for future preparedness.They highlight the necessity for continuous monitoring, comprehensive analysis, and the development of adaptable strategies to better address the challenges of business relocation in conflict situations.
In conclusion, the Ukrainian government's emergency response to assist displaced businesses has been instrumental in mitigating the war's economic impact, fostering resilience, and contributing to the stability and development of host regions.The experience provides critical insights for future emergency responses, emphasizing the importance of a coordinated, adaptable, and supportive approach.
recent location of manufacturing plants in the South (1 st ed.).Committee of the South, National Planning Association.NGO UFRA P7 8.

APPENDIX A
Zakarpattia Regional Development Agency P8 9.
Poltava Regional Development Agency OFFICE OF EUROPEAN INTEGRATION P12 13.
Cherkasy Regional Development Agency P14

OFFICIAL WRITTEN RESPONSES FROM OBLAST STATE ADMINISTRATIONS
and Venhorst (2014) focused on relocating highly educated self-employed individuals and underscored the role of human capital in business relocation decisions.Shen et al. (2017) emphasize the role of regulatory factors in shaping business relocation patterns in response to environmental concerns.Lee (2022) examined the transactional challenges businesses face when relocating and how they can affect their performance.Wang et al. (2019) investigated the dislocation between China's economy and carbon emissions due to industrial relocation.Chen et al. (2020) explored the relationship between relocation and corporate performance.Zhang et al. (2022) examined the importance of considering compliance costs in relocation decisions.Tramaco (2019) provides industry-specific insights into business relocation.Fan and Liu (2021) highlight the global nature of business relocation.Balbontin and Hensher (2019) examined the drivers of business location and relocation decisions, emphasizing firm-specific and location-specific factors.Dewit et al. (2019) investigated the impact of employment protection on firm relocation decisions.Birg and Voßwinkel (2021) reveal the effects of emission taxes on firm relocation.Valentino et al. (2019) provide an institutional perspective on business relocation.Kapitsinis (2019) examines the impact of economic crises on firm relocation, using the Greek SME movement to Bulgaria as a case study.Wasileski et al. (2011) compared business closure and relocation following natural disasters (earthquakes and hurricanes).Hellwig (2023) focused on the relocation patterns of young digital firms in Germany.Györffi and Oren (2006) underline the role of policy and market forces in shaping relocation decisions.Drozd (2019) addresses the technical aspects of relocation, particularly moving infrastructure.Brown (2019) provides practical insights for firms contemplating relocation decisions.The empirical investigation conducted by Brouwer et al. (2004) considers factors such as firm size, industry, and regional characteristics in understanding relocation patterns.Gourinchas et al. (2017) analyzed the Greek crisis, which had implications for the relocation of firms, and discussed economic crises and their broader impacts.Onikiienko et al. (2021) provided information on how cash flows change during periods of economic shock.Siodla (2021) provides insights into how disasters can influence business location decisions.Vigdor (2008) offers insights into the consequences of natural disasters on business relocations.Sastry and Gregory (2014) highlight the geographical aspects of post-disaster business relocations.Knoben and Oerlemans (2005) provide a literature review on the effects of firm relocation on its performance.Iuchi and Mutter (2020) analyze community relocation approaches after significant disasters in Asia.The main idea of Bower and Weerasinghe (2021) was to analyze planned relocation cases in the context of hazards, disasters, and climate change.UNDP (2013) underscores the vulnerability of businesses to various hazards.Verme and Schuettler (2021) offer insights into the broader consequences of displacement, which can affect local economies.Sasse (2020) examines the displacement caused by war, focusing on the case of Ukraine.

Source:
Ministry of Economy of Ukraine (2023).

Figure 1 .
Figure 1.Number of enterprises relocated under the Government Relocation Program (cumulative number of entities)

Figure 2 .Figure 3 .
Figure 2. General classification of problems in the business relocation process

Figure 4 .
Figure 4. Difficulties of relocation for authorities

Figure 5 .
Figure 5. Communication between potential relocators and regional authorities