Explore BrainMass

Doing Business in Unstable Countries in the World

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

What are some of the major political risks associated with investing in a foreign country? How does the threat of global terrorism effect foreign investment and the foreign-exchange market in the world today? In your opinion, what might be done to promote investment in unstable or potentially dangerous areas of the world?

© BrainMass Inc. brainmass.com October 25, 2018, 9:25 am ad1c9bdddf

Solution Preview

On Political risks:

Perry (2013) describes the major political risk as a "political decisions made within a country that might result in an unanticipated loss to investors". It is the "willingness" to pay its obligation and "maintain a hospitable climate for outside investment".

A country will fail as a haven for investment if it has a volatile political environment.

On the other hand, Christy (2014) said that major examples of political risks are "acts of war, terrorism, and military coups".

On global terrorism and foreign investment and foreign exchange:

Empirical studies on global terrorism were diverse.

Using a sample of 112 countries, the Pennsylvania State University found out that "foreign direct investments, trade, and portfolio ...

Solution Summary

This is a discourse on how to do business in dangerous areas of the world.

See Also This Related BrainMass Solution

Exchange Rates & IMF

1. Why might the IMF be called the "lender of last resort"? What are three of the tools they use for establishing economic stability in a country?

2. Which is more conducive to international trade, the fixed or the floating exchange rate? Why?

3. Choose one of the World Bank's present projects (from the website) and tell how it will benefit international trade.

4. Country A has a stable currency and does substantial business with country B. The following is a history of recent exchange rates, given country A's rate is a constant 1:

Date Country B Exchange

April 1 240:1

May 1 255:1

June 1 310: 1

July 1 315: 1

What is happening here? How will a company in Country A purchase products from a company in Country B if it takes three months for the order to go through?

5. Explain why and how a company would shift from Localization strategy to Transnational Strategy. Give an example even if you have to make it up.

View Full Posting Details