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Government Law and Political Risks in International Business - Coggle…
Government Law and Political Risks in International Business
Political Risks
actions by groups of people or governments that have the potential to affect the immediate and/or long-term viability of a firm.
revolution that results in confiscation of a firm’s operations down to small changes in the tax code
financial risk that a country’s government will suddenly change its policies
Types of Political Risks
Systematic Risk
Unsystematic Risk
Credit or Default Risk
Country Risk
Foreign Exchange Risk
Interest Rate Risk
Political Risk
Market Risk
Domestic Economic Conditions
ability of a country to purchase a company’s products
The Legal Environment
A domestic firm must follow the laws and customs of its home country
international business faces a more complex task
It must obey the laws not only of its home country but also of all the host countries in which it operates
Common Law
Civil Law
Theocratic Law