Political Risk Research Papers - Academia.edu (original) (raw)

How does a firm in one country evaluate an investment in a firm in another country, or how does it evaluate a foreign project that the firm itself is undertaking? The firm must estimate future free cash flows just as in a domestic... more

How does a firm in one country evaluate an investment in a firm in another country, or how does it evaluate a foreign project that the firm itself is undertaking? The firm must estimate future free cash flows just as in a domestic project, but choosing an appropriate discount rate is a particular challenge. This study examines the determinants of the discount rate for an international acquisition or project by examining the sources of risk in an international setting. These risks include stock-market price risk measured with ...

The transborder extension of the services offered by multinationals construction companies that have settled in Africa exposes them to the political risk factors pertinent to the host country. This paper seeks to identify and assess the... more

The transborder extension of the services offered by multinationals construction companies that have settled in Africa exposes them to the political risk factors pertinent to the host country. This paper seeks to identify and assess the prevalence of political risk factors influencing the corporate performance of multinational companies in the Northeastern zones of Nigeria. Structured questionnaires were administered to 78 expatriates project managers from six multinationals construction companies within six states of Nigeria's Northeast area. Data collected were analysed using the relative importance index and factor analysis. Findings showed terrorism, corruption, insurgencies, sabotages and kidnapping were the five major political risk factors with the highest level of occurrence, while terrorism, kidnappings, sabotage, corruption and change in government are those with the highest impact on operations in the region. The recommendation includes the need for the Federal, State and Local Governments to provide adequate security for lives, properties and investments.

In this paper, the time–frequency dependency of political risk as well as economic and financial risks is explored in Venezuela using quarterly data from 1984Q1 to 2018Q4. The present study uses the wavelet coherence technique, which... more

In this paper, the time–frequency dependency of political risk as well as economic and financial risks is explored in Venezuela using quarterly data from 1984Q1 to 2018Q4. The present study uses the wavelet coherence technique, which allows the investigation
of both the long and short-term causal relationships between political risk and economic and financial risks in Venezuela. The findings of this study indicate that: (i)
significant vulnerabilities in political risk, economic risk, and financial risk are observed at different time periods and different frequency levels; (ii) political risk has a strong power for explaining economic risk from 1995 to 2005 in the long run, while between 1984 and 2010, economic risk and political risk are positively correlated at different frequency levels; (iii) in the long run, changes in political risk significantly lead to changes in financial risk in Venezuela.

The shift toward multinational corporations has exposed the auditor to many risks not found on domestic audits, including foreign currency issues, international political risks, international economic risks, greater information asymmetry,... more

The shift toward multinational corporations has exposed the auditor to many risks not found on domestic audits, including foreign currency issues, international political risks, international economic risks, greater information asymmetry, and greater complexity. As the client base of the large accounting firms becomes more multinational, it is important to understand whether multinational risk factors are associated with “audit failures.” We

This article analyses the concept of political risk, its evolution and conceptualisation, and explores its utility as a means of understanding political events and processes that can threaten order, stability and continuity in... more

This article analyses the concept of political risk, its evolution and conceptualisation, and explores its utility as a means of understanding political events and processes that can threaten order, stability and continuity in International Relations and disrupt the normal practices of inter-state investment, trade and commerce. More particularly, the article organises the disparate literature that surrounds the concept of political risk such that it might be more rigorously applied as a social science method for understanding political events and their effects upon commercial and strategic activities.

When a firm chooses to enter or continue business in a foreign market, it becomes exposed to associated political risks which should be assessed and managed. Help is available for becoming aware of the level of macro political risk; that... more

When a firm chooses to enter or continue business in a foreign market, it becomes exposed to associated political risks which should be assessed and managed. Help is available for becoming aware of the level of macro political risk; that is, the political risk across industries or all businesses in entire countries or geographic regions. Yet, surprisingly little guidance exists by which to identify and assess firm-specific political risks, termed micro political risk. Herein, we offer some new perspectives on the nature of micro political risk within a host country, illustrating how it stems from economic, societal, and governmental forces. We have compiled a number of firm-specific variables which can affect the firm’s micro political risk profile, and advance an innovative methodology by which executives can address these variables and develop an assessment of their firm’s micro political risk. Examples of micro political risk situations are provided, along with discussion of implementing the proposed methodology.

本文利用霸權穩定理論，檢證與比較中美兩國外援對跨國直接投資的影響。研究方法為結構方程式，研究對象為2000─2013年145個開發中國家與轉型國家。實證結果顯示：中美兩國外援都可充當國際投資公共財──降低跨國直接投資政治風險，且雙方都在搭對方的便車。... more

本文利用霸權穩定理論，檢證與比較中美兩國外援對跨國直接投資的影響。研究方法為結構方程式，研究對象為2000─2013年145個開發中國家與轉型國家。實證結果顯示：中美兩國外援都可充當國際投資公共財──降低跨國直接投資政治風險，且雙方都在搭對方的便車。
具體而言，本文發現有六：第一，政治風險阻礙跨國直接投資，中資企業也不例外；這是過去文獻忽略之處。第二，中美兩國外援都有利於跨國直接投資。第三，排除政治改革的中國大陸外援，其對跨國直接投資的貢獻，明顯低於美國外援。第四，中國大陸外援旨在，為其企業走出去鋪路。第五，美國外援側重其國家安全。換言之，中美兩國提供國際公共財，都有其自利動機。最後，中美兩國跨國直接投資，都受惠於對方的外援；差別在於，中美雙方受惠程度不同而已。
總體而言，霸權穩定理論對現今國際政經體系，具有高度的解釋力。唯本文的實證結果，可從三方面補充霸權穩定理論。第一，國際公共財的供給，並非霸權國專有權力；維繫國際政經秩序的意願，才是居中關鍵。第二，國際公共財的供給國，沒有意識型態限制，只要恪守市場經濟規範、不傷害受援國的治理品質亦可。第三，霸權國提供國際公共財，都不是純利他考量；反之皆為政治精算的結果。

The paper explores the determinants of foreign direct investment (FDI) in Sudan over the period (1970–2010). The study considers the market size, inflation rate, exchange rate, indirect taxes, trade openness, and investment incentive... more

The paper explores the determinants of foreign direct investment (FDI) in Sudan over the period (1970–2010). The study considers the market size, inflation rate, exchange rate, indirect taxes, trade openness, and investment incentive policy as factors influencing FDI. The study uses the cointegration and error-correction techniques to identify the short- and long-run dynamics of the FDI determinants. The Johansen cointegration test statistics indentify four cointegrating relations among the series, which implies an existence of long-run relationship among the FDI determinants. The results of the long-run FDI equation indicate that FDI flows in Sudan are influenced by the market size, inflation rate, exchange rate, and investment incentive policy. The error-correction term suggests that approximately 17% of total disequilibrium in FDI flows was being corrected each year. Moreover, Granger causality results show that there is a unidirectional causality running from each of the exchange rate, investment incentive policy, and the market size to FDI.

The contracted project is the basic form of Sino-Libyan economic cooperation. The authors hope that Chinese constructors will learn from this case study. This article assesses the political risk for Chinese contracted projects at three... more

The contracted project is the basic form of Sino-Libyan economic cooperation. The authors hope that Chinese constructors will learn from this case study. This article assesses the political risk for Chinese contracted projects at three levels and studies their countermeasures to this emergency and the effects of political risks on Chinese constructors in Libya. The research finds that Chinese constructors are not good at political risk management due to their traditional attitudes toward risk and the attitudes of the Chinese government toward overseas losses of Chinese state-owned enterprises (SOEs). However, Chinese SOEs are more experienced than private-owned enterprises in dealing with emergencies.

Infrastructure provision the world over has undergone a series of profound changes in the manner of its financing and governance over the last 30 years or so. While the role of the state has diminished as a direct provider, builder and... more

Infrastructure provision the world over has undergone a series of profound changes in the manner of its financing and governance over the last 30 years or so. While the role of the state has diminished as a direct provider, builder and operator of infrastructure, its role as regulator and overseer has undergone substantial growth, increasing the regulatory burden on the state. While this transition has occurred relatively smoothly in developed country contexts, in developing countries the diffusion of the regulatory state has produced manifestly different forms of governance, stressing the regulatory capacity of existing and newly formed regulatory bodies. This paper explores the impact and manifestations of regulatory diffusion in the context of the Thai energy sector and the governance mechanisms responsible for electricity generation, transmission and distribution.