Application of the Dynamic Factor Model for Analyzing the Adaptation of the Industry in the Russian Federation to Sanctions

The study is dedicated to assessing the effectiveness of the dynamic factor model (DFM) as a tool for identifying and analyzing the prerequisites for structural changes in the dynamics of the industry in the Russian Federation amid economic uncertainty. Special attention is given to aspects such as business expectations, the shortage of skilled labor, and trade barriers arising from imposed international sanctions. The analysis shows that sanctions exert significant pressure on certain segments of Russian industry, particularly in the production of high-tech products for the civilian sector, including automotive and electronics. However, the study also emphasizes the ability of the Russian industrial complex to adapt to new conditions. In response to the ongoing impact of sanctions, domestic enterprises have begun to seek alternative trade routes, actively developing cooperation with countries in Asia and the Middle East. Additionally, Russian companies are taking steps to restore their production base by implementing innovative technologies and modernizing their facilities. The results of the study demonstrate that despite the negative impact of sanctions on some aspects of industrial activity, the use of the dynamic factor model allows for the identification of mechanisms of adaptation and flexibility within Russian businesses, which are finding ways to maintain and strengthen their positions in the face of external challenges.