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Foundations on country risks for FDI - Coggle Diagram
Foundations on country risks for FDI
Real factors
Economic tolerance
Higher electoral participation
Terrorism
A system of strong checks and balances and the ability to restrict press freedoms
Previous experencies with FDI
Predicting consumer behaviour
May discount terrorism risk automatically
Strong corporate and government relationships
Political risks
Political events to be one of the most important factors of FDI.
Perception
Terrorism
It does not appear that terrorism per se had a heavy influence on FDI decision making.
In the complicated world of terrorism, undoubtedly, both arguments are true and neither is true.
Economic and political risks
Changes in per-capita GDP were shown to be associated with the level of terrorist activity
Developed countries
Lower probability of FDI.
They recover faster from any non-planned event
Stable finantial system
Infant mortality rates as a factor
Developing countries
Lower probabilities of FDI.
May not recover fast from any non-plan event
dependence on FDI and export-led growth
Vulnerability in extract entreprises
High profit
Mining licenses are the most common ways in which governments indirectly expropriate mining investments.
Impact in local communities
indigenous peoples by taking care to be inclusive in the planning, construction, and operation of mines.
Not negotiating is a common mistake
Adequate, and prompt compensation
Laws in frecuent change
Experienced investors in natural resource projects know that when they agree to tariff, tax, or revenue sharing arrangements.
Enviormental compliance
Not only nature impacto also the impact they have on local environments and populations
Waste products
Risks
Discriminatory regulations
Mass nationalization
Instability in economic and social bases
Banks rating systems
Decision makers
• Economic health of the investment destination
• Difficulty associated with doing business in a given country
• Existence of rule of law and good corporate governance
• Existence of corporate and government connections
• Level of public discord
• Media attention
• Cost of production