INTL-BUS-3780 Lecture Notes - Lecture 5: Political Risk Insurance, Vertical Integration, Economist Intelligence Unit
Document Summary
Goals of government: naional sovereignty and the goal of self-preservaion stay in power and maintain authority while in poverty. Poliical instability: we don"t see a lot of poliical instability - us, commitment to the rules of the game. When planning investments, countries want to do business with those that are stable. In a stable poliical climate, the government maintains consistency when it comes to their commitment to the way they act towards business. You want to invest in a company that your projected proits will not be afected by changes in the way you have to conduct your business. When you have to change the way you do business its going to afect your projecions. Domesicaion turning over parts of the company to locals; transferring parial ownership; local. Price controls control the price of imported products in sectors that are sensiive (ex: food & health); price loor and price ceiling.
