by Young Yee-hoi, Kitty. / Thesis (Ph.D.)--Chinese University of Hong Kong, 1992. / Includes bibliographical references (leaves 194-210). / ABSTRACT --- p.ii / ACKNOWLEDGEMENTS --- p.x / TABLE OF CONTENTS --- p.xiii / LIST OF TABLES --- p.xvi / LIST OF FIGURES --- p.xix / LIST OF APPENDICES --- p.xx / CHAPTER / Chapter I. --- INTRODUCTION --- p.1 / Historical Background --- p.4 / The Situation in Hong Kong --- p.6 / Effects on Hong Kong --- p.9 / Financial Instability --- p.9 / Brain Drain --- p.10 / Exodus of Firms --- p.12 / Relocation of Manufacturing Plants --- p.14 / "Diplomatic Relations: China, Britain and Hong Kong" --- p.15 / Confidence in Local Government --- p.16 / Change in Government Policy --- p.16 / Level of Overseas Investment --- p.17 / Studies on Political Risk in Hong Kong --- p.21 / Chapter II. --- LITERATURE REVIEW --- p.25 / Political Risk --- p.25 / Characteristics of Political Risk --- p.29 / Interpretations of Political Risk --- p.32 / Political Risk Indicators --- p.33 / Effects of Political Risk --- p.42 / Profit --- p.42 / Operations of the Firm --- p.43 / Financial Status of the Firm --- p.45 / Transferability of Assets --- p.45 / Revenue --- p.46 / Expropriation and Confiscation of the Firm --- p.47 / Policy and Strategy of the Firm --- p.47 / Dealing With Political Risk --- p.49 / Maximization of Short-term Profits --- p.49 / Minimization of Capital Commitment --- p.52 / Increase of Global Flexibilities --- p.54 / Adapt to Local Requests --- p.56 / Changing the Environment --- p.56 / Transferring the Risk --- p.58 / Divesting --- p.58 / Prospect Theory --- p.60 / Previous Studies --- p.64 / Previous Business-related Studies on Prospects Theory --- p.65 / Application of Prospect Theory in Business --- p.69 / Chapter III. --- RESEARCH DESIGN --- p.71 / Purpose of the Study --- p.71 / Scope of Study --- p.76 / Conceptual Model --- p.79 / General Introduction --- p.79 / Perception of Political Risk --- p.83 / Reference Point --- p.86 / Risk Handling Strategies --- p.87 / Company and Personal Characteristics --- p.88 / Operationalization of the Major Constructs --- p.89 / Assessment of Political Risk --- p.89 / Political Risk Handling Methods --- p.90 / Reference Point --- p.91 / Moderators: Company and Individual Characteristics --- p.94 / Hypothesis --- p.95 / Risk Handling Strategies --- p.95 / Role of the Moderators --- p.102 / Development of the Questionnaire --- p.104 / Survey Design --- p.107 / Chapter IV. --- DATA ANALYSIS --- p.110 / General Description --- p.110 / Company and Individual Characteristics --- p.111 / Assessment of Political Risk --- p.115 / Political Risk Handling Strategies --- p.120 / Reference Point --- p.125 / Data Analysis --- p.126 / Method of Analysis --- p.130 / Findings --- p.133 / Political Risk Assessment --- p.133 / Prospect Theory --- p.135 / Political Risk Assessment and Reference Point --- p.136 / Relating Strategies and Political Risk Assessment --- p.140 / Effects of Moderating Variables on Strategies --- p.150 / Implications --- p.175 / Prospect Theory --- p.175 / Political Risk Studies --- p.179 / Implications for Headquarters --- p.183 / Chapter V. --- CONCLUSION --- p.187 / Prospect Theory --- p.187 / Applying Prospect Theory in Business Strategies --- p.189 / Value to Theorists --- p.190 / Value to Management --- p.191 / BIBLIOGRAPHY --- p.194 / APPENDICES --- p.211