Approaches to the problems of political risk in foreign direct investment

Simple item page
dc.contributor.advisorSchrire, Robert Aen_ZA
dc.contributor.authorHoward, Christopher Oen_ZA
dc.date.accessioned2016-03-28T14:30:04Z
dc.date.available2016-03-28T14:30:04Z
dc.date.issued1993en_ZA
dc.description.abstractThis 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.identifier.apacitationHoward, 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/11427/18270en_ZA
dc.identifier.chicagocitationHoward, 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/11427/18270en_ZA
dc.identifier.citationHoward, C. 1993. Approaches to the problems of political risk in foreign direct investment. University of Cape Town.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
dc.identifier.urihttp://hdl.handle.net/11427/18270
dc.identifier.vancouvercitationHoward 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/11427/18270en_ZA
dc.language.isoengen_ZA
dc.publisher.departmentDepartment of Political Studiesen_ZA
dc.publisher.facultyFaculty of Humanitiesen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subject.otherPolitica Studiesen_ZA
dc.subject.otherInvestments, Foreignen_ZA
dc.subject.otherInternational business enterprisesen_ZA
dc.titleApproaches to the problems of political risk in foreign direct investmenten_ZA
dc.typeMaster Thesis
dc.type.qualificationlevelMasters
dc.type.qualificationnameMAen_ZA
uct.type.filetypeText
uct.type.filetypeImage
uct.type.publicationResearchen_ZA
uct.type.resourceThesisen_ZA
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
thesis_hum_1993_howard_christopher_o.pdf
Size:
3.78 MB
Format:
Adobe Portable Document Format
Description:
Download
Collections
Masters