This thesis is dedicated to developing a concept that allows for predicting the magnitude of political instability periods. To that end existing literature is consulted to explore the most appropriate definitions and explanatory models for creating a elaborated approach to political instability. On the basis of this refined concept, that defines political instability as a latent condition rather than an occurrence, hypotheses are devised. These hypotheses are tested by employing a exploratory correlation analysis on a limited sample, which yields results that encourage confidence in the predictive potential of the developed concept. As suggested in the explanatory framework the analysis finds that the magnitude of conflict, resulting from political instability, is positively correlated with social fragmentation and individual deprivation, while being negatively correlated to military professionalism. A fourth explanatory component - viable alternatives to conflict - was not found to have any effect.

Using a dataset of 7757 firms in Brazil, China, India, and Russia from 2009 to 2014, this article examines the effect of political risk variables on financial flexibility and the effects of financial flexibility on future firm value, capital investment, cash holdings and the probability of default while controlling for firm-level effects and political variables. Effective representation of the majority is found to be associated with a higher level of financial flexibility. In terms of the effects of financial flexibility on firm value, results that are much stronger than previously reported are found. However, unlike previous work, the current research does not find that increased financial flexibility leads to increased capital expenditures. It is found that financially flexible firms in these countries lower their probability of default on average by about 0.6 %. It is also found that giving greater voice to the majority and greater adherence to the rule of law adds to the value of firms.

Yes / We find a negative relation between firm-level political risk and future delta-hedged equity option returns. A quasi-natural experiment based on Brexit corroborates this finding since after the referendum there is a decrease in the option returns of the positive-Brexit exposure firms. The predictability is driven by the jump risk component of political uncertainty, is more pronounced in periods of high intermediary constraints and is stronger among high-demand pressure options but weaker among politically active firms. Finally, consistent with a risk-based explanation, investors of options on politically risky firms get compensated with high returns when major unexpected political shocks take place.

「政治風險」近來成為台商海外投資時討論的重要議題，但國內目前在這方面的探討多僅限於個案式的報導，本研究的貢獻即在於將國外學者對政治風險的討論統整歸納，建立整合性的理論架構，在此架構中將澄清政治風險的慨念、找出可能導致政治風險的事件來源、討論政治風險的評估機制並提出管理政治風險的方式。研究中將政治風險的來源分為地主國的政治情況、地主國政府政策、地主國政府行為、當地社會情況及地主國與他國的關係五類；其會影響企業海外投資的管控權、營運、利潤與績效及個人生命財產安全；其因應策略則有經濟上的嚇阻、規避及適應策略三類。而為試驗此一架構的實用性，本研究以台商的海外投資行為作一驗証。 　　本研究的發現如下： 　　1. 大部份台商不認為其海外投資面臨了高度政治風險，而其對政治風險的認知著重在「地主國的政治情況穩定度」，忽略其他來源（如：地主國與他國的關係），顯示政治風險的慨念尚待推展。 　　2. 七成的台商有進行海外投資相關訊息的搜集，但基本上台商大多缺乏系統性的評估機制，以主觀的評估為主，但多會將評估的結果納入長期規劃的考量中；而評估機制的完善與否會影響公司海外投資的績效。 　　3. 進入策略的選擇與政治風險有關，當面臨高度政治風險時，台商多不願進入投資，若必須進入則會採取「合資」的方式，以降低風險。 　　4. 台商對政治風險的管理會因風險所造成的影響不同而有異，但普遍說來，台商主要是採「適應策略」與「規避策略」，主控性較高的「經濟上的嚇阻策略」在運用上尚不普遍。這與台商對投資國的依賴度太深有關。 　　5. 研究中發現不同的產業別其所面臨的政治風險並無顯著不同，這與國外文獻的採討結果有所差異。 　　6. 海外投資的規模與企業所面臨的政治風險無顯著相關，公司的規模愈大，其評估證制會較有系統，但未達統計上的顯著性。 　　7. 高階管理者的個人特質會影響公司對政治風險的因應對策：主管特質為「混合型」者，偏向於採行建立人際網路、從事公關活動的方式來降候風險；具「冒險／好挑戰」特質的高階主管喜採取經濟上的嚇阻策略來因應政治風險；「保守型」的高階主管則較常以規避風險策略來因應。 　　8. 針對上述發現，本研究的建議為：(1)台商應擴大對政治風險的認知、將風險的評估機制制度化、並在進行海外投資時掌握關鍵活動，如此一來可以增加管理政治風險的彈性；(2)由於目前台商偏向以規避的方式來因應政治風險，因此政府應扮演更積極的角色，提供管理政治風險的具體協助，如：與投資國訂定保障投資條款、非商業風險投保的推動等。

The aim of this study is to analyse political-security risk in Uganda. It emanates from the research question: Does Uganda pose a political-security risk to prospective foreign investment or involvement? The need to move beyond a political risk analysis without entering into a country risk analysis, poses the research problem to develop a political-security risk analysis framework and to apply it to Uganda. This problem generates three subsidiary questions: How appropriate (or inappropriate) are existing risk analysis frameworks? Do existing frameworks contain generic elements that can provide a basis for a synthesised framework? To what extent is a country specific framework applicable to other countries? Therefore, three sub-problems are addressed, namely to determine the appropriateness of selected frameworks; to identify generic elements to construct a synthesised framework; and to assess the applicability of this framework for the analysis of political-security risk in other African countries. Following a definition of the concepts risk, country risk, political risk and political-security risk (analysis), selected frameworks for risk analysis were analysed. The generic elements of these frameworks, namely The Economist (EIU), Business Environment Risk Intelligence (BERI), International Country Risk Guide (ICRG) and Political Risk Services (PRS) frameworks, were reduced to three categories and synthesised into a single framework which was applied to Uganda. The categories of risk indicators pertained to security, political and socio-economic risks respectively. These indicators and the allocated risk scores were used to construct a political-security risk index in respect of which the summed scores provided an index figure of risk that was interpreted in accordance with an interpretation scale. In respect of Uganda, its more recent political history was described and the political, security and socio-economic circumstances prevailing in the country analysed. These conditions were assessed and measured against the indicated risk factors and according to the risk index. The summed political-security risk index score for Uganda was 55.5 out of a maximum of 100. In accordance with the interpretation scale, this constitutes an intermediate risk. Based on this Uganda is not, at present, the most suitable destination for foreign investment or involvement. This does not disallow investment or involvement but if indeed the case, it should be done with circumspection. The situation is volatile to the extent that it can rapidly change for the better or the worse, depending on trends concerning the risk categories, or more specifically a turn of events in respect of a particular key risk indicator. Since the synthesised risk analysis framework is able to accommodate key variables pertaining to politics and security in African states, and since it has provided an indication of risk in respect of Uganda, it is suggested for application to other African states. The need for modification, based on the particularities of other countries, is not excluded. It is also proposed that similar exercises be conducted at intervals of six months. This will indicate whether the variables used were, in fact, valid and reliable, and whether additional variables should be included. The repetition of the analysis also indicates risk trends and allows for the monitoring of risks, which will be conducive to risk management. / Dissertation (MSS (Political Sciences))--University of Pretoria, 2003. / Political Sciences / unrestricted

Thesis (MA (Political Science))--University of Stellenbosch, 2010. / ENGLISH ABSTRACT: The central research question of this study concerns the level of political risk that the Ogaden region of eastern Ethiopia poses for companies operating in, or intending to operating in the oil and gas industry of that region. The aim is to answer that question as well as two further subquestions. The first sub-question concerns issues pertaining to the factors and indicators that would be included in a political risk model specifically envisaged for the oil and gas industry, and the second concerns the practical application of political risk as a decision-making and management tool for investors. It is practically impossible to gather all the relevant information when undertaking a political risk analysis, to know all the unknowns. It would take an immense amount of time to attempt such an analysis and the costs would be exorbitant. In creating a political risk model specific to the oil and gas industry, a methodological approach is adopted to streamline this process. It is the aim of this research study to engage in this streamlining process; selecting the most salient variables that can then be incorporated into an industry specific model, which will yield realistic and practical results. In terms of the political risk indication, the political risk analysis of the Ogden returned a score putting the region in the high risk indication bracket. In terms of investment indication, the score indicates a moderate to high risk for investments the oil and gas industry. This does not mean that investors should stay away from the region. A high degree of risk, if sufficiently managed, can result in increased opportunities for higher returns for the investor. Beyond the traditional approaches to risk management there are other avenues that the investor may choose to follow, such as a commitment to engage with local stakeholders. These initiatives should extend beyond mere financial incentives to a more genuine form of community interaction, with extensive local consultation. Strategies, policies, and procedures should be developed that ensure that companies engage productively with NGOs and the media at local levels in order create a suitable environment for all involved. Political risk is more than simply providing a report with a risk rating tagged to the end of it. It should be a fully integrated part of the investor’s strategy, essential to the continued success and profitability of the investment. / AFRIKAANSE OPSOMMING: Die sentrale navorsingsvraag van hierdie studie handel oor die vlak van politieke risiko wat maatskappye wat besigheidsbelange in die Ogaden streek van oos Ethiopië het, of wat beplan om besigheidsbelange in die olie- en gasbedryf te begin, in die gesig staar. Die doel is om die vlak van politieke risiko te identifiseer en om verder twee sub-vrae te beantwoord. Die eerste sub-vraag is om die faktore en indikatore te identifiseer wat deel sal vorm van ‘n politieke risikomodel, spesifiek vir die olie- en gasbedryf en die tweede handel oor die praktiese aanwending van politieke risiko as ’n besluitnemings- en risikobestuur-instrument vir beleggers. Dit is prakties onmoontlik om alle relevante informasie in te samel wanneer ’n politieke risiko-analise gedoen word, of om bewus te wees van al die onbekende aspekte. Dit sal ‘n ongelooflike lang tydperk neem asook die kostes sal uiters hoog wees. Wanneer ‘n politieke risikomodel spesifiek vir die olie- en gasindustrie gebou word, word ’n metodologiese benadering om die proses te vergemaklik gevolg. Dit is die doel van hierdie studie om by te dra tot die vereenvoudiging van hierdie metodologiese proses deur die mees prominente aspekte te selekteer wat gevolglik geïnkorporeer kan word in ‘n industrie spesifieke model. Die model sal beide realistiese en praktiese resultate bied. Ten opsigte van die skaal vir belegging en politieke risiko indikasie, het politieke risiko analise van die Ogaden gedui op ’n hoë risiko indikasievlak. Vir belegging dui die risikovlak op ’n medium tot hoë risikovlak vir die olie- en gasindustrie. Dit beteken nie dat beleggers die area noodwendig moet vermy nie. Indien ’n hoë risikovlak aanwesig is, kan suksesvolle bestuur steeds verhoogde winsgeleenthede vir die belegger verseker. Behalwe vir die tradisionele benaderings tot risikobestuur en risikomitigasie is daar ook ander moontlikhede wat die belegger kan volg om die vlak van risiko te verlaag, soos ’n ooreenkoms om saam met plaaslike belanghebbendes te werk. Sulke meganismes moet verby finansiële belonings strek en ‘n opregte vorm van gemeenskapsinteraksie aanneem wat net kan gebeur deur middel van uitgebreide plaaslike konsultasie. Strategie, beleid en prosedure moet ontwikkel word, wat sal verseker dat maatskappye optimaal saamwerk met nie-regerings-organisasies en die media op plaaslike vlak. Dit sal verseker dat ’n geskikte omgewing vir alle partye geskep word. Poltieke risiko is veel meer as net risiko-evaluasie waar ’n vlak van risiko verskaf word. Dit behoort ten volle deel te wees van die belegging en is essensieël tot die sukses en winsvlak vir die belegger.

Doctor of Philosophy / This thesis is concerned with the role of the United States investment insurance agency, the Overseas Private Investment Corporation (OPIC), in enforcing property and contract rights on behalf of United States (U.S.) infrastructure investors, pursuant to the deregulation of infrastructure markets across the developing world. Drawing on evidence from two recent high profile breach of regulatory contract disputes between OPIC insured U.S. energy companies and Indonesia and India respectively, the thesis finds that while legalized modes of dispute settlement have proliferated, the ‘rules of the game’— their efficacy in delimiting outcomes—emerge as a function of state power and interests, as states undertake to enforce or resist legal obligations. Second, and contrary to the image of U.S. foreign economic policy-makers as beholden to corporate interests, the thesis finds that the agency’s transformation from ‘aid to trade’ as underpinned the expansion of U.S. infrastructure investors to the developing world during the 1990s was driven by state officials consistent with evolving conceptions of U.S. national interests, central to which was the desire to expand markets for U.S. foreign investors and capital goods exporters. In this regard, the transformation of developing country infrastructure markets and the shift in the modes of resolving investor-state expropriation disputes as but one element of economic globalization and the ‘legalization’ of dispute settlement respectively are revealed as a function of U.S. material interests and power at the point of enforcement. The thesis contends, however, that the changes observed reflect not only U.S. power and interests but a specifically American conception of private property and contract rights so as to reveal OPIC investment insurance as a conduit for the diffusion of shifting property norms concerning regulatory taking (expropriation) from the United States to the world economy at large.

This paper explores the relationship between presidential elections and sovereign credit default swap (CDS) returns, as well as, equity returns in the Latin American countries, Argentina, Brazil, Chile and Mexico. In particular, this paper tests whether or not presidential elections, which potentially represent political uncertainty and risk, affect sovereign CDS returns. I also analyze stock returns during the elections of each country to establish benchmarks that I compare to the CDS returns. Specifically, I evaluate the movement of CDS and equity adjusted returns (i.e. returns measured as deviations from average returns) over 7 presidential elections from 2005 to 2011. The baseline panel regression did not find statistical significance in the dummy election coefficients, but did find significance in the equity intercept coefficient at the 10 percent level. This result suggests that, on average, adjusted equity returns were higher during election periods than adjusted equity returns outside of election periods. I discuss the implications of these results later in the paper.

In this paper, we examine the relationship between political risk as an international environmental determinant of capital structure as well as other factors that contribute to capital structure including leverage, foreign exchange risk, agency costs of debt, and collateral value of assets. We conducted this research on a sample of 200 Singaporean, non-financial, listed domiciled multinational firms over the period of 2005 to 2009. The results suggest that political risk is irrelevant to the multinational capital structure, foreign exchange risk, agency costs of debt, and (netted) collateral value of assets. We find that the results remain unchanged after controlling for size and industry. The findings produce evidence that foreign exchange risk, as another international factor is also irrelevant to the Singaporean multinational capital structure choice. Additionally, agency costs of debt and (netted) fixed assets have a negative association with leverage for Singaporean multinational corporations.

In an overarching aim to bridge the gap between political science and international business studies, this study explores how, against the backgrond of globalization, multinational coprorations understand and deal with the influence of many differet and sometimes very dynamic political environments, by focusing on the political risk management of a number of Swedish multinational corporations invoved in foreign investing. Based on interviewswith coproate executives in these corporations, this qualitative study found that Swedish invetsors use a "pragmatic" approach toeards political risk and the political envrionments in which they operate. The study also drwas attention to teh role of multinational corporations in teh formation of politica risk as teh result of corporate politiacl activity and the possibility that multinational corporations are moving towards a more pronounced political role.It is suggetsed that political risk needs to be considered not only in terms of the potential impact of the political environment on firms, but also in terms of teh impact of teh firm on the environment, as the political environment cannot be taken as a given, but is the outcome of a process that involves adaption to the environment as well as attempts to change that environment.