Approaches to the problems of political risk in foreign direct investment

 

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dc.contributor.advisor Schrire, Robert A en_ZA
dc.contributor.author Howard, Christopher O en_ZA
dc.date.accessioned 2016-03-28T14:30:04Z
dc.date.available 2016-03-28T14:30:04Z
dc.date.issued 1993 en_ZA
dc.identifier.citation Howard, C. 1993. Approaches to the problems of political risk in foreign direct investment. University of Cape Town. en_ZA
dc.identifier.uri http://hdl.handle.net/11427/18270
dc.description.abstract This thesis examines the challenges multinational enterprises face from political risk when making and operating foreign direct investments. The thesis considers political risk and a wide variety of approaches to its analysis and provides insight into the process of foreign direct investment, the nature of the political threat facing it, foreign investment decision making by multinationals, and the tools developed in the commercial, academic, and governmental arenas to avoid and combat the effects of political risk. In essence, the thesis addresses a business application of theories and methodologies used in political studies. The first hypothesis is: if political risk is properly understood as a phenomenon of the political environment, then it a) defies direct quantification and b) can be explained as a series of discrete elements which can be analyzed separately. The second hypothesis is: if political risk is properly understood as a series of non-quantifiable elements, analysis of political risk cannot be depended upon alone to protect multinational enterprises from political risk in foreign direct investment. The first hypothesis is addressed through a critical review and consideration of business and political risk literature. Two analytical tools are developed in this process: a ladder of cognition consisting of a series of conditions of knowledge which can be held regarding a specific risk, and indicating the type and approximate accuracy of analysis which can be undertaken of such risk; and a representation of the political risk equation as a two stage process consisting of an abstract (environmental) risk event and a discrete effect which the event may or may not have on a specific investment. The second hypothesis is addressed through a critical review of methods of political risk analysis including "qualitative" approaches with roots in traditional studies and "quantitative" approaches derived from statistical analysis and behavioralist-based determinism. Critiques of each approach include operational strengths and weaknesses, performance histories (when applicable), conceptual and practical capabilities from the perspective of the analytical tools described above, and theoretical strengths and weaknesses from the perspective of the political studies discipline. Both hypotheses are supported and the thesis concludes by reviewing tools which can be used by multinationals to manage and mitigate the effects of political risk and considering additional academic work in this arena which would be useful in developing this application of political studies. en_ZA
dc.language.iso eng en_ZA
dc.subject.other Politica Studies en_ZA
dc.subject.other Investments, Foreign en_ZA
dc.subject.other International business enterprises en_ZA
dc.title Approaches to the problems of political risk in foreign direct investment en_ZA
dc.type Master Thesis
uct.type.publication Research en_ZA
uct.type.resource Thesis en_ZA
dc.publisher.institution University of Cape Town
dc.publisher.faculty Faculty of Humanities en_ZA
dc.publisher.department Department of Political Studies en_ZA
dc.type.qualificationlevel Masters
dc.type.qualificationname MA en_ZA
uct.type.filetype Text
uct.type.filetype Image
dc.identifier.apacitation Howard, C. O. (1993). <i>Approaches to the problems of political risk in foreign direct investment</i>. (Thesis). University of Cape Town ,Faculty of Humanities ,Department of Political Studies. Retrieved from http://hdl.handle.net/11427/18270 en_ZA
dc.identifier.chicagocitation Howard, Christopher O. <i>"Approaches to the problems of political risk in foreign direct investment."</i> Thesis., University of Cape Town ,Faculty of Humanities ,Department of Political Studies, 1993. http://hdl.handle.net/11427/18270 en_ZA
dc.identifier.vancouvercitation Howard CO. Approaches to the problems of political risk in foreign direct investment. [Thesis]. University of Cape Town ,Faculty of Humanities ,Department of Political Studies, 1993 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/18270 en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Howard, Christopher O AB - This thesis examines the challenges multinational enterprises face from political risk when making and operating foreign direct investments. The thesis considers political risk and a wide variety of approaches to its analysis and provides insight into the process of foreign direct investment, the nature of the political threat facing it, foreign investment decision making by multinationals, and the tools developed in the commercial, academic, and governmental arenas to avoid and combat the effects of political risk. In essence, the thesis addresses a business application of theories and methodologies used in political studies. The first hypothesis is: if political risk is properly understood as a phenomenon of the political environment, then it a) defies direct quantification and b) can be explained as a series of discrete elements which can be analyzed separately. The second hypothesis is: if political risk is properly understood as a series of non-quantifiable elements, analysis of political risk cannot be depended upon alone to protect multinational enterprises from political risk in foreign direct investment. The first hypothesis is addressed through a critical review and consideration of business and political risk literature. Two analytical tools are developed in this process: a ladder of cognition consisting of a series of conditions of knowledge which can be held regarding a specific risk, and indicating the type and approximate accuracy of analysis which can be undertaken of such risk; and a representation of the political risk equation as a two stage process consisting of an abstract (environmental) risk event and a discrete effect which the event may or may not have on a specific investment. The second hypothesis is addressed through a critical review of methods of political risk analysis including "qualitative" approaches with roots in traditional studies and "quantitative" approaches derived from statistical analysis and behavioralist-based determinism. Critiques of each approach include operational strengths and weaknesses, performance histories (when applicable), conceptual and practical capabilities from the perspective of the analytical tools described above, and theoretical strengths and weaknesses from the perspective of the political studies discipline. Both hypotheses are supported and the thesis concludes by reviewing tools which can be used by multinationals to manage and mitigate the effects of political risk and considering additional academic work in this arena which would be useful in developing this application of political studies. DA - 1993 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 1993 T1 - Approaches to the problems of political risk in foreign direct investment TI - Approaches to the problems of political risk in foreign direct investment UR - http://hdl.handle.net/11427/18270 ER - en_ZA


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