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Five Main Types of Political Risks

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What are the five main types of political risk? How might each affect international business activities?

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Solution Summary

The solution identifies the main types of political risks.

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Vorton (2010) specified the types of political risk as:

- Conflict and Violence
- Terrorism and Kidnapping
- Property Seizure
- Policy Changes
- Local Content Requirements

Conflict and violence discourages the growth of international business as consumers and investors will move to more conflict-free and violence-free areas.

Terrorism and kidnapping is bad for business. Many foreign investors are targets for kidnapping since they have the resources to pay the ransom.

Property seizure is ...

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