Political risk analysis and direct foreign investment: some problems of definition and measurement

1986 ◽  
Vol 28 (2) ◽  
pp. 15-16
Author(s):  
S. Prakash Sethi ◽  
K. A. N. Luther

This final chapter is devoted to the analysis of the risks associated with foreign direct investments, namely business (commercial) risk, political risk, and currency exchange rate risk. Each risk factor is considered as a separate evaluation criterion. That is, an investment project may be rejected due to having a high level of any one of these three risk factors. For instance, a profitable investment proposal may not have a significant business risk but might have a high level of political risk requiring its rejection. Risk analysis is conducted only if a foreign investment project is profitable from the viewpoint of the parent company. Otherwise, there is no need for a risk analysis since a direct investment project that does not create profit for the parent company would be rejected anyway.


Author(s):  
Zahidur Rahman ◽  
Jannatul Ferdous Bristy

In the endeavor of conquering the worlds consumers, multinational companies face enormous risks. Such risks may arise from different political, economic, and financial factors. These factors are commonly referred to country risk as a whole. Focusing Bangladesh in this regard, objective of this study is to find out the level of country risk in terms of political, economic, and financial riskiness. Analysis of country risk has been done using an internationally recognized methodology named International Country Risk Guide (ICRG). For political risk analysis, primary data has been collected from 20 journalists, bureaucrats and policy makers, business persons, corporate professionals, and academicians with a structured closed-ended questionnaire. Results indicate that Bangladesh is in high risk position in terms of political risk, low risk position in terms of economic risk and very low risk position in terms of financial risk. Compositely, Bangladesh has been found to be a moderately risky country for investment.


1992 ◽  
Vol 18 (3) ◽  
pp. 167-178 ◽  
Author(s):  
J.M. Chermak
Keyword(s):  

1989 ◽  
Vol 21 (1-2) ◽  
pp. 221-239 ◽  
Author(s):  
Eva Paus

Since 1982, most Latin American countries have witnessed slow economic growth and a persistent net transfer of funds to the rest of the world as a result of sharply reduced inflows of private international bank lending and large debt payment obligations. Against this background direct foreign investment (DFI) has received increasing attention as one important element in overcoming the present stagnation-cum-debt crisis as well as in contributing to renewed economic growth. This article explores the possible contributions of DFI to the future economic growth and development of the region.1


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