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This article is the second of the author’s works devoted to a comprehensive study of the economic efficiency of Russian renewable energy (RE) projects. The main goal of this paper is to study the level of influence of political risk on the economic efficiency of RE projects that are implemented in the Russian energy market using a state support program. Fifty-two solar, wind and small hydropower projects, which have received support in the form of a capacity-based support scheme in 2018-2020, were selected as objects of research. The methodological basis of the work was the classical methods of investment analysis and specific industry approach. They were supplemented with the author’s tool for calculating the monetary equivalent of political risk that takes into account the probability of the termination of support from the state. The practice-based assessment utilized the developed scenarios depending on changes in foreign and domestic international credit ratings of the country. The study of the impact of political risk for three stages of RE projects was carried out. Based on the results of the analysis, conclusions were drawn about generally insignificant influence of political risk on the economic efficiency of Russian RE projects. Recommendations for the development of state support programs in the event of the impact of political risks only were generated. The obtained research results are of practical and methodological value. It will be used in studying the impact of other specific risks on the effectiveness of Russian RE projects, as well as in developing recommendations enabling the Russian RE market to give up state support. The work was supported by a grant of the President of the Russian Federation (МК- 4549.2021.2).

In the aftermath of the Global Financial Crisis, the long-held confidence that ‘nationality’ would not matter in a globalised economy has dwindled. As the impact of economic and foreign policy on firms’ internationalisation and investment decisions appears to grow, and economic nationalism built on constructs of ‘nationality of the company’ gains weight, companies doing business abroad, including multinational enterprises operating in the US and Europe, are increasingly exposed to (often unexpected) implications of their ‘nationality’. We elaborate on related perspectives to the theme developed in the IB, global strategy, and international management literature and in business history. Based on these readings, we conceptualise the opaque notion of ‘nationality of the company’ and outline perspectives. We argue that ‘nationality’ appears in very different ways and suggest that research should focus more on specific political and institutional environments, and specific constructs of ‘nationality’.

The empirical investigation of which risk factor—political or financial—is the optimal driver of country risk in emerging economies in the twenty-first century has grown into a significant and volatile issue in recent decades. This paper investigates the linkages between political risk and financial risk in four Balkan economies (i.e., Greece, Albania, Bulgaria, and Romania) from 1984 Q3 to 2018 Q4, using non-linear autoregressive distributed lag co-integration (NARDL) and wavelet coherence approaches. As a result, findings from the links between political risk and financial risk are being used to provide significant insights into effective urban planning in Balkan cities. The outcomes of the NARDAL analysis indicate that there are short-term and long-term asymmetric links between political risk and financial risk in the Balkan countries except for Romania. The wavelet coherence study also revealed that there is significant vulnerability between political risk and financial risk at different frequencies in the region, also, political risk is a key for predicting financial risk over the selected study period at different frequencies in Albania and Bulgaria.

Extant literature suggests that the banking sector’s sustainability is achievable by minimizing the risk factors, in particular, credit risk (CR). Despite prior studies, there are fewer attempts to considerably probe the role of country governance settings in managing CR and ultimately achieving sustainability. Therefore, this study aims to test this nexus for the banking sector operating in BRICS developing economies. Specifically, this research attempts to explore whether country governance has a moderator role between CR and the exposure of environments to risk factors. To achieve these objectives, we conduct panel data analysis using the quantile (QR) and fixed effects (FE) estimation methods. The results show that increasing liquidity, profitability, capital requirements, and income diversification lead to decreasing CR, whereas increasing inefficiency causes an increase in CR. In addition, the results reveal that a country’s increasing vulnerability to a specific financial risk index (FRI), economic risk index (ERI), and political risk index (PRI); developing capital markets; increasing lending interest rates; and weakening country governance quality is significantly linked to increasing CR. Remarkably, the results underscore that country governance has a significant moderator role, and by enhancing the quality of country governance, the impact of country-specific FRI, ERI, and PRI on CR could be attenuated.

Mineral exploration is an industry of uncertainties. Only 0,1% of exploration projects become mines, as the volume, content, and quality of a deposit all must be economically justifiable to find funding in the global financial market. However, the business risk of mineral exploration is not limited to geotechnical and financial risks, as social aspects are now considered the biggest risk facing the industry. Here, we identify three social aspects of business risk that may challenge the industry: political, reputational, and local acceptability. Political risk arises when sectoral authorities and the related legislation come into conflict, such as mineral versus environmental legislation. Reputational risk lies in the relationship between a company’s past and current operations in combination with the legitimacy of the entire industry. Local acceptability risk parallels the social license to operate, with poor corporate conduct, competition with other livelihoods, intrusion into culturally sensitive areas, and local values critical of mining all potentially evoking resistance. Companies must be aware not only of the nuances of each social aspect but also of the interplay between them to understand the full scale and scope of the business risks associated with exploration. Validerad;2023;Nivå 2;2023-06-29 (sofila);Funder: University of Lapland

Which factors make some American multinational corporations (MNCs) take political action in response to the US–China Trade War and cause others to stay on the sidelines? We identify China-based subsidiaries of US firms to identify firms’ political actions in response to the trade war. We combine data on firms’ tariff exposure, economic actions in China, and political actions in the United States during the trade war. Together these data highlight the divergent strategies with which firms engage. Even though more than 63 percent of MNCs in our sample were adversely impacted by tariffs, only 22 percent voice opposition and 7 percent exit in response to the trade war. Our analysis reveals that US MNCs in China differ in their business models, ownership structure, experience in China, and size of capital investments. These firm-level factors determine the degree to which US MNCs are embedded in China. This in turn shapes how firms perceive political risk and choose from the menu of options to deal with the trade war. Size and age increase voice while joint-venture status decreases it.

PurposeGeopolitical risks associated with the return of great power politics and growing nationalism have generated new challenges for foreign investors across industries. Oil and gas companies are well acquainted with such risks and have developed strategies to manage them. This paper reviews five of these strategies: divorcing ownership control from operating control in designing collaborative ventures; proactively managing stakeholder relationships; ensuring transparency and communication; diversifying risks while proactively positioning for emerging opportunities; and deliberately planning for exit should such an eventuality arise. Firms outside of oil and gas can draw on these strategies as they navigate the emerging geopolitical context.Design/methodology/approachThis paper reviews five strategies that oil and gas companies can use to manage geopolitical risk: divorcing ownership control from operating control in designing collaborative ventures; proactively managing stakeholder relationships; ensuring transparency and communication; diversifying risks while proactively positioning for emerging opportunities; and deliberately planning for exit should such an eventuality arise.FindingsThis study identifies several strategies that oil and gas companies have used to manage geopolitical risks. These tools will be increasingly important in the shifting global political landscape.Originality/valueDrawing on the experiences of oil and gas companies, this study has identified several strategies that companies can use to shield themselves from the risks that are currently emanating from geopolitics. While these best practices originate in the experiences of oil and gas firms, the ability to deftly manage geopolitical risks is becoming an important prerequisite for companies across industries.

We present a model linking prices of political binary options to financial assets that applies in the very particular circumstance of the overnight session following an election. Contrary to most of the existing literature, the model is derived from economic first principles and applies in a general setting. We find that under suitable assumptions, election and financial markets will be cointegrated. Deviations from risk neutrality lead to the presence of a non-linear term relating to risk in the cointegrating relationship. The model is tested on three recent political events: The 2014 Scottish independence referendum, the 2016 Brexit referendum and the 2016 US presidential election. Strong support is found for two events (the Brexit referendum and the 2016 Trump win). We find that weak market efficiency broadly holds although there are violations of the order of minutes to tens of minutes. This is apparently caused by betting markets leading financial markets, a phenomena that is observed for all three events. This finding is consistent with the conclusion of the existing literature that prediction markets have superior forecasting ability to other methods. A realistic ex-ante trading strategy is presented for Brexit that profits from these inefficiencies. However, the success is not repeated for the 2016 presidential election. This is due to an apparent deviation from risk neutrality that is not observed on the night of Brexit.

Stock prices may display predictable patterns around major political events, particularly in emerging market economies where political risk is a key component of asset risk premiums. One distinct event that would be expected to result in an abrupt increase in political risk is elections. Motivated by this notion, we study the returns for a set of indicator and sectoral indices of Borsa Istanbul stocks and the U.S. Dollar–Turkish Lira exchange rate around political elections held in Turkey over 2001–2020. Our tests reveal an accumulation of economically and statistically significant positive abnormal returns for all Borsa Istanbul stock indices and negative abnormal returns for the U.S. Dollar–Turkish Lira exchange rate over a window that starts as early as a month before the election date and extends for two weeks into the post-election period, with the effect being particularly strong in the week that immediately follows the election. Consistent with a political risk-based story, volatility of index returns starts increasing over the same period and plateaus out at a level that is roughly one-and-a-half to two-folds greater than its pre-election period average. Hisse senedi fiyatlarının, özellikle siyasi riskin beklenen risk primlerinin önemli bir bileşeni olduğu gelişmekte olan ekonomilerde, önemli siyasi olaylar etrafında öngörülebilir kalıplar göstermesi beklenebilir. Siyasi riskte belirgin bir artışa yol açabilecek önemli olaylardan biri de seçimlerdir. Bu makalede,bu düşünceden yola çıkılarak Borsa İstanbul gösterge ve sektörel endekslerinin ve Amerikan Doları-Türk Lirası döviz kurunun 2001–2020 yılları arasında Türkiye’de gerçekleştirilen seçimler etrafındaki davranışı incelenmiştir. Testlerimiz seçim tarihlerinden bir ay önce başlayan ve seçim sonrasında iki hafta devam eden bir pencerede, ağırlıkla seçim gününü takip eden haftada olmak üzere, Borsa Istanbul endekslerinde ekonomik ve istatistiksel olarak anlamlı bir kümülatif pozitif anormal getiri, Amerikan Doları-Türk Lirası döviz kurunda ise negatif bir kümülatif anormal getiri ortaya koymaktadır. Siyasi risk temelli bir hikaye ile tutarlı olarak, günlük endeks getirilerindeki oynaklığın aynı periyot içerisinde artmaya başladığı ve seçim öncesi dönemdeki ortalamasından kabaca bir buçuk ila iki kat daha yüksek bir seviyede doyuma ulaştığı gözlemlenmiştir. Publisher's Version

Resumo Em fevereiro de 2022, a Rússia invadiu os territórios do leste da Ucrânia. Pressionada pela opinião pública e pelo governo britânico, a British Petroleum (BP) anunciou, três dias após a invasão, o abandono da sua participação acionária de quase 20% na estatal russa Rosneft, com custo avaliado em USD 25 bilhões para a empresa. O caso coloca o leitor na posição do CEO da multinacional, Bernard Looney, para refletir sobre o redesenho da estratégia da empresa no que diz respeito à avaliação do impacto do risco político em seus demais negócios do mundo. O caso foi pensado para alunos de graduação e pós-graduação em administração, relações internacionais e áreas afins que queiram tratar de temas como geopolítica do petróleo, estratégia empresarial, risco político e negócios internacionais. Resumen En febrero de 2022, Rusia invadió los territorios orientales de Ucrania. Presionada por la opinión pública y el gobierno británico, British Petroleum (BP) anunció, tres días después de la invasión, el abandono de su participación accionaria de casi el 20% en la estatal rusa Rosneft, con un costo estimado de USD 25 mil millones para la compañía. El caso pone al lector en la posición del CEO de la multinacional, Bernard Looney, para reflexionar sobre el rediseño de la estrategia de la compañía con respecto a evaluar el impacto del riesgo político en sus otros negocios en el mundo. El caso fue concebido para estudiantes de grado y posgrado de Administración de Empresas, Relaciones Internacionales y áreas afines que quieran abordar temas como geopolítica petrolera, estrategia empresarial, riesgo político y negocios internacionales. Abstract In February 2022, Russia invaded the eastern territories of Ukraine. Three days after the invasion, pressured by public opinion and the British government, British Petroleum (BP) announced the abandonment of its almost 20% equity shareholding in Russian state-owned Rosneft at an estimated cost of USD 25 billion for the company. The case puts the reader in the position of CEO Bernard Looney to reflect on the redesign of the company’s strategy with regard to assessing the impact of political risk on its other businesses in the world. The case was designed for undergraduate and graduate students in Business Administration, International Relations, and related areas who want to address topics such as oil geopolitics, business strategy, political risk, and international business.

We examine whether firms’ political hedging activities are effective at mitigating political risk. Focusing on the risk induced by partisan politics, we measure political hedging as the degree to which firms’ political connections are balanced across Republican and Democratic candidates. We find that greater political hedging is associated with reduced stock return volatility, particularly during periods of higher policy uncertainty. Similarly, greater political hedging is associated with reduced crash risk, investment volatility, and earnings volatility. Moreover, the reduction in earnings volatility appears to relate to both a firm’s taxes and its operating activities, as we find that greater political hedging is associated with reduced cash effective tax rate volatility and pretax income volatility. We further find investors are better able to anticipate future earnings for firms that engage in political hedging, suggesting that political hedging helps improve firms’ information environments. Lastly, we perform an event study using President Obama’s Clean Power Plan. We find that on the days this policy proposal was debated in Congress, energy and utility firms experienced heightened intraday return volatility (relative to other firms and nonevent days). However, this heightened volatility is mitigated for energy and utility firms that are more politically hedged. Overall, we conclude that political hedging is an effective risk management tool that helps mitigate firm risk. This paper was accepted by Suraj Srinivasan, accounting.

Bu çalışmanın amacı, Türkiye’nin ekonomik, finansal ve politik risk oranları ile büyüme arasındaki nedensellik ilişkisini incelemektir. Çalışmada 2000:01– 2020:06 döneminde söz konusu risk oranları ile büyüme arasındaki ilişkiyi incelemek için Toda-Yamamoto nedensellik testi, Hatemi-J tarafından geliştirilen Bootstrap Toda-Yamamoto nedensellik testi ve zamanla değişen simetrik ve asimetrik nedensellik testleri kullanılmıştır. Elde edilen bulgular şu şekildedir: (i) Toda-Yamamoto nedensellik testine göre; finansal riskten büyümeye, ekonomik riskten finansal riske ve ekonomik riskten politik riske doğru nedensellik ilişkisi bulunmaktadır. (ii) Bootstrap Toda-Yamamoto nedensellik testine göre finansal riskten büyümeye doğru nedensellik ilişkisi vardır. Bootstrap Toda-Yamamoto asimetrik nedensellik testine göre; finansal riskteki pozitif şok büyümede pozitif şoka, finansal riskteki negatif şok büyümede negatif şoka ve politik riskteki negatif şok ise büyümede pozitif şoka yol açmaktadır. (iii) Zamanla değişen simetrik nedensellik testine göre nedensellik ilişkisinin olduğu dönemler; ekonomik riskten büyümeye doğru, finansal riskten büyümeye doğru ve politik riskten büyümeye doğru tespit edilmiştir. Zamanla değişen asimetrik nedensellik testine göre nedensellik ilişkisinin olduğu dönemler; ekonomik riskteki negatif şokun büyümedeki pozitif şoka ekonomik riskteki pozitif şokun büyümedeki negatif şoka; finansal riskteki negatif şokun büyümedeki pozitif şoka, finansal riskteki pozitif şokun büyümedeki negatif şoka etkilerini göstermektedir. Ancak söz konusu dönemde sadece politik riskteki pozitif şokun büyümede negatif şoka neden olduğu dönem görülmektedir., This study aims to examine the causality relationship between Turkey’s economic, financial and political risk ratios and growth. Toda-Yamamoto causality, Bootstrap Toda-Yamamoto causality, and time-varying symmetric and asymmetric causality tests were used to examine the relationship between the risk ratios and growth between 2000- 2020. The findings show that (i) The Toda-Yamamoto causality test shows a causal relationship between financial risk and growth, economic risk and financial risk, and economic risk and political risk. (ii) The Bootstrap Toda-Yamamoto causality test revealed a causal relationship between financial risk and growth. The Bootstrap Toda-Yamamoto, asymmetric causality test, showed that a positive shock in financial risk causes a positive shock in growth, a negative shock in financial risk causes a negative shock in growth, and a negative shock in political risk causes a positive shock in growth. (iii) The time-varying relationship symmetric causality tests allowed for detecting causality between economic risk and growth, financial risk and growth, and political risk and growth. The time-varying relationship asymmetric causality tests revealed that a negative shock in economic risk caused a positive shock in growth; a positive shock in economic risk caused a negative shock in growth; a negative shock in financial risk caused a positive shock in growth and demonstrated the effects of the positive shock in financial risk as a negative shock in growth. However, a negative shock in growth was only observed when there was a positive shock in political risk.

Purpose Political risk is an important determinant of portfolio returns. The basic purpose of this study is to revisit the importance of political risk in a constrained portfolio, namely, a Shariah-compliant equity portfolio (SCEP). Furthermore, the performance of such a constrained portfolio is also compared with a conventional portfolio that invests in all stocks. Design/methodology/approach The portfolios are constructed from stock-level data and invested in 61 international markets. The set of Shariah-compliant stocks is obtained with screening guidelines of Dow Jones Islamic Market indices. The weights of each constituent in both Shariah-compliant and conventional portfolios are driven by its relative exposure to political risk for the period 1996–2018. Findings Results show that, compared to conventional investors, Shariah-compliant investors gain substantial benefits when the allocation decision is based on political risk. A Shariah-compliant portfolio outperforms its conventional counterpart by 7.98% annually when tilted toward politically stable countries. The economic benefits further increase to 804 basis points when the portfolio allocates more funds to politically unstable countries. The tilted SCEP successfully reduces the downside risk, resulting in improved financial performance stability. Originality/value To the best of the authors’ knowledge, this is the first effort of its nature to highlight the importance of political risk in the context of SCEPs.

Doctoral level thesis., This thesis considers the behaviour and relationships between financial and prediction markets around elections. We begin by reviewing the literature. There are many small studies of individual elections and events, particularly of the 2016 UK European Union referendum. However, no studies that consider multiple events, nor present theories that apply in a general setting, are found. We believe this is a gap in the literature. Chapter 1 begins with a study of the Brexit referendum. Using a flexible prior and Bayesian updating, we demonstrate a major violation of semi-strong market efficiency in both the betting and currency markets on the night following the vote. It appears that it took a full three hours for prices to reflect the information contained in the publicly available results of the referendum. Chapter 2 presents a model linking the prices of financial and binary options in the prediction markets in the overnight session following an election. Starting from basic assumptions we find that prices in both markets should be cointegrated. Under risk neutrality the relationship is linear. However, departures from this assumption result in a non-linear cointegrating relationship. We test the theory on three recent elections. Strong support for the theory is found for two events. The linear cointegrating model fits the data from the night of the EU referendum remarkably well. However, departures from risk neutrality are needed to explain the behaviour observed on the night of the 2016 US presidential election. Chapter 3 considers pricing relationships in the weeks and months leading up to an election. Again using economic assumptions, we derive a relationship between asset price returns and changes in the prices of betting market binary options linked to an election result. This model is extended to equities using the ubiquitous Fama–French 5 factor model. The result is a 6 factor characteristic model, where the additional factor is related to political risk. We test the model on six recent elections. Using daily data, strong support is found for the theory for four events and weak evidence for one. The remaining election does not appear to be informative for asset prices. Interesting relationships are also uncovered between firm characteristics and political sensitivity. This is achieved by exploring the political factor loadings of the different equities under study. The main contributions of this thesis are, one, using a flexible Bayesian approach to demonstrate that, without a shadow of a doubt, any `bubble’ in opinion for remain continued well into the night of the EU referendum, and two, presenting pricing models of prediction and financial markets that apply in general settings and have strong support in the data. We also show that on nights after elections, betting markets lead financial markets on the scale of minutes to tens of minutes. This is consistent with, and an extension of, the conclusion of the existing literature that prediction markets have superior forecasting ability. Whether or not this lead–lag relationship occurs at other times prior to political events is an open research question., Economic and Social Research Council

Today, banks, which act as financial intermediaries, ensure the growth of the economy. Banks, being a channel in monetary policies and monetary issues, are effective institutions in ensuring sustainable macroeconomic stability. In addition, banks are one of the institutions that are exposed to the most financial risk by nature. This article explores the long-term effects of economic, financial and political stabilities on the banking sector. This research covers the 21-year period between 1996–2017. The aim of this study is to examine the effects of economic, financial and political stabilities, which are the components of country risk, on the banking sector in selected Balkan countries and using the panel data analysis technique, which is one of the econometric analysis methods. Panel cross-sectional dependence, unit root tests, cointegration and causality tests were applied according to country risk indicators for the six selected Balkan countries. The selected Balkan countries have paid attention to their development in the country’s economies and their involvement in global trade and to adopt the modern banking system. In addition, six Balkan countries have been selected as examples in the study due to their close relations with Turkey in the socio-cultural and economic fields. The results of the panel tests indicated the of unit root tests as well as the existence of cointegration. The p values obtained as a result of cointegration analysis are less than 0.005, indicating the existence of cointegration. It has been concluded that there is a cointegration relationship in all three hypotheses, which have the effects of economic, financial and political stabilities on the banking sector. According to the Granger causality test results, there is a bidirectional causality relationship between the banking variable and the economic stabilities variable. Having long-term and causal relationships between selected Balkan economies requires financial and economic stability to be supported simultaneously. In short, it has been determined that economic, financial and political stabilities have a relationship with sustainable banking in the long term.

This study provides fresh evidence regarding the dynamic association that is believed to exist in relation to green finance (GF), economic growth (GDP), political risk (PR), economic risk (ER), and carbon dioxide (CO2) emissions. It therefore uses the dataset pertaining to China from most recent time-series – covering the period spanning from the years of 1990 to 2020, by employing the Morlet Wavelet Analysis technique. The empirical findings of the wavelet power spectrum reveal that green finance GF and ER are vulnerable in the short- and long-run, and the short-run, respectively. At the same time, no vulnerability has been observed in the GDP, PR, and CO2 emissions. In addition to this, the wavelet coherence also reveals the bidirectional causal association that exists between GF-CO2 and ER-CO2, but only in the short run. It must also be taken into consideration that the causal influence of CO2 is deemed to be greater than the GF and ER, respectively. Besides this, a bidirectional causal nexus also exists between the GDP and CO2 emissions, only in the long run. Furthermore, the association between the economic growths follows both the phase and antiphase associations. Moreover, the study also reveals that there is no significant causal link between the PR and CO2 emissions. The results emphasize that the significance of green finance investment will tend to increase with strict policy implications, stabilization or minimization of economic risk and political risk. The same will also take place while promoting environmentally friendly production via economic growth, so as to reduce CO2 emission in the region taken into account.

Problem setting. Globalization in spite of its obvious advantages for the development of human civilization constantly polarizes the world system. Existing contradictions between states and even regions with different civilization traditions at the beginning of the XXI century actualized their choosing of asymmetric response strategies to the actual challenges of globalization and security threats. Such strategies are often aimed at generating and strengthening the space of uncertainty and risk-landscapes in the opponent countries. World experience shows that the components of such asymmetric approaches in foreign policy are the reproduction of so-called “hybrid threats” and fomenting “hybrid wars”, which become a constant source of political risks for the object of such “hybrid” impact.In this connection, the necessity to analyze the whole range of risks and, of course, political and related critical vulnerabilities becomes very important for modern states in order to ensure resistance to hybrid and other threats of globalization, as well as to ensure integration of the process of governing such risks into the structure of public strategic planning and crisis management, in particular. In the case of Ukraine, all this actualizes the scientific reflection of the hybrid threats impact of in the context of finding optimal ways to develop risk-oriented public administration.Recent research and publications analysis. The study of hybrid wars and threats, in particular regarding Ukraine, is now the focus of many specialists around the world. In particular, among foreign scientists this problem is studied by P. Cullen, K. Giles, E. Reichborn, M. Snegovay, N. Wegge. In Ukraine, such specialists as M. Gonchar, V. Gorbulin, S. Dyachenko, S. Zhuk, A. Zvarych, A. Ishchuk, E. Magda, Y. Tishchenko, A. Chubik, and R. Shutov devote their works to this issue mainly from the point of view of the maintenance of national security.Highlighting previously unsettled parts of the general problem. The problem of existing connection of hybrid warfare phenomena and hybrid threats with the state of state management of political and other national risks in Ukraine has not actually been raised, which causes the necessity to reveal the influence of these risk-forming factors of globalization for the modern Ukrainian state and proving that their actualization became a consequence of the government’s neglect of risk management activities.Paper main body. The author emphasizes a methodological approach to assessment of hybrid threats, according to which the latter are the result of the aggressor’s focus on specific vulnerabilities of the target system, as well as its ability to synchronize a wide range of its capabilities that are adapted to these vulnerabilities.The article substantiates that hybrid threats and hybrid warfare cannot be recognized without taking into account the assessment of political and other risks.The author highlights Ukraine’s internal vulnerabilities in political, social, economic, information and military areas. These are: the constant competition of political elites for the power resources of the state while maintaining the clan-oligarchic model of political relations; the weak role of strategic planning of public policy and the low level of strategic communications and coordination of government actors; low efficiency of the main legislative body; deprofessionalization of public service; resource-intensive industry and unreformed energy system; weak macroeconomic indicators and high level of foreign debt; underdeveloped cyber-security system; corrupt law enforcement agencies; imbalanced national security system; social and moral crisis of Ukrainian society.The paper also identifies and describes the main political risk factors that were specifically created by Russia in Ukraine. They are: systematic informational and psychological impact on the Ukrainian society by anti-Ukrainian and pro-Russian narratives; support of pro-Russian groups of influence both in the Ukrainian politics and establishment, and in the marginalized segment of society; construction of foreign policy circumstances that put into question Ukraine’s ability to systematically respond to the threats of national security.Conclusions of the research and prospects for further studies. The conducted research allowed proving that inefficiency and actual absence of any activity in managing political and other national risks at the governmentally level during the whole period of its independence became one of the main sources of Ukraine’s critical vulnerabilities along with the possibility for the aggressor to strengthen their action. The differentiation of political risk factors that formed the critical vulnerabilities of the Ukrainian state into the ones that are inherent to Ukraine and those that were generated by the aggressor was justified.The author considers the analysis of other political risks of globalization, in particular, the integration of the national economy into the world economy system as a perspective direction for further research.

The contribution of tourism to a country’s economy is determined by country risk measures such as economic, financial and political risk. This study aimed to investigate short and long-run effects of country risk factors on international tourist arrivals and tourism revenue for the South African tourism industry. The sample period consists of monthly time series data of tourist arrivals, tourism revenue, and country risk factors from January 2004 to December 2018. Data was analysed using the Autoregressive distributed lag (ARDL) and non-linear ARDL (NARDL) models. The findings showed that the long-run effects of country risk factors on tourist arrivals and revenue are asymmetric. Economic, financial, and political measures of country risk negatively affect tourist arrivals, however, tourism revenue responds differently to changes in these risk factors. Political risk has the highest effect on the tourism industry compared to economic and financial risk factors. Overall, this study established that both international tourist arrivals and tourism revenue are threatened by financial shocks indicating that an unconducive financial environment has long-term negative implications on the South African tourism industry.

While it is prominent for governments across the globe to promote charitable giving, few governments directly intervene in charitable fundraising due to ethical and political risks. An exception is the Chinese government that has actively sought private donations. Using a national dataset of Chinese giving, this study explores from a general political participation perspective how individuals responded to different levels of state intervention in private charity. It finds that people made (a) voluntary donations (little state intervention) in relation to their social involvement and civic engagement, (b) suggested donations (e.g., the state called for donations) in relation to their civic participation and formal political participation, and (c) coerced donations (e.g., the state demanded donations) in relation to their personal bonds with the state. Thus, while appropriate state intervention seems productive, undue intervention may damage both charity and state legitimacy. Implications and suggestions for future research are included.

This study provides a first attempt to analyze the role of credit in the political stability of developing countries. By examining the case of Nigeria using annual data over the period 1984–2017 and the non-linear ARDL (NARDL) approach, we find that credit supply shocks have a significant and non-linear impact on short- and long-term political risk. In terms of asymmetry, we show that positive shocks have a positive and more pronounced impact than negative shocks in the short run, proving that credit expansion can be effective in terms of short-term political stability. In the long run, positive credit shocks increase political risk while negative shocks decrease it. These results suggest that an improvement in Nigeria’s prudential requirements for credit supply could be more effective for political stability than an easing of credit in the long run. In addition, better management of oil revenues, particularly through effective sterilization policies, is essential to prevent oil price fluctuations from leading to a highly pro-cyclical supply of credit, which threatens long-term political stability.

Food security and its determinants are being targeted at various levels, i.e., individual, household, national, and regional levels. Our study contributes by two ways. First, it explores the role of political risk indicators along with other important factors in the food security of 35 Asian countries. Second, spatial effects are also considered while determining the factors affecting food security at the regional level. Spatial panel models are estimated using panel data of 35 countries ranging from 2000 to 2018. The significance of spatial effects is established by employing various diagnostic tests, and hence, direct effects and spatial effects are estimated using Spatial Durbin Model to analyze the phenomenon. Empirical results of the study show that rising political risk indicators as well as environmental degradation adversely affect the food security of the country. These adverse effects expand spatially to neighboring countries of the given affected country. Hence, the goal of food security urges UNO to devise an effective strategy to decrease the political risk, improve institutional quality, settle external and internal conflicts, and create religious and ethnic harmony in the affected countries of Asia. These efforts may focus on food security, health, education, and economic development at the regional level. Moreover, clean and sustainable environment must be part of all efforts to achieve food security at the global level. Spatial effects of environmental degradation indicate that the countries which are polluting the environment are adversely affecting food security at the regional level. Positive direct effects and negative spatial effects of trade openness point out the zero-sum game of the countries and hence, food insecure countries might be careful while adopting trade openness policy. Besides, strategies to control high population growth in Asia and economic growth are suggested to achieve food security in Asia. The results are useful for academia, policymakers, and international donor agencies alike.

PurposeThe authors provide a comparative analysis between emerging and developed financial markets in terms of the effects of political risks on stock market returns and volatility. The authors also examine whether this impact depends on the nature of political risks. Therefore, this study aims to detect which financial markets are the most profitable and the riskiest in terms of political risks.Design/methodology/approachThe authors investigate the impact of political risks on the excess stock market return and its conditional volatility using the generalized ARCH model for a sample of 46 developed and emerging markets over a period ranging from 1995 to 2019. In order to test how the nature of political risks affects equity excess returns and volatility differently in different markets, the authors employ (1) a composite political risk score, (2) the four subgroups of political risks as defined by Bekaert et al. (2005, 2014) and (3) the individual dimensions of political risks.FindingsThe findings indicate that the composite political risk is priced into both stock markets. The effect of political risks is positive for excess returns and negative for volatility. The authors show that the political risk leads to more volatility in developed markets. Nevertheless, the effect of individual components varies according to the market category.Practical implicationsThe authors provide a framework for predicting market returns and volatility using changes in the political risk of the country. The findings help investors make investment decisions based on the political decisions of governments. In other words, investors should consider political uncertainty when determining their expected earnings.Originality/valueThe authors engage monthly panel data methodology in terms of the political risk stock market relationship. In addition, the authors consider recent and very long data covering the period 1995–2019. Furthermore, this study combines three various political risk measures, and both equity returns and volatility.

Summary Relocating communities out of increasingly risk-prone areas is effective for adapting to climate change. Relocations are particularly relevant for small island regions, where sea-level-rise-induced retreat from the coast will be inevitable for some communities. However, relocations are contested because communities are generally reluctant to move, and decision-makers face high political risks. As a consequence, relocations mostly occur after extreme events. In such situations, existing rules can be undermined by politics and power, driving relocation policy and resulting in varying relocation outcomes. However, these political and policy dimensions of post-disaster relocations have received little attention. Here, we study the politics and power dynamics of two post-tsunami relocations in the Maldives. Using process tracing, we find that vested interests, rather than adaptation considerations, explain varying relocation outcomes. Our findings highlight the complex power structures inherent in post-disaster relocations, which explain why similar events and drivers did not produce similar outcomes.

Foreign direct investment (FDI) is a desirable form of capital inflows to emerging and developing countries. Such investments are less susceptible to crises and sudden breakdowns. Therefore, foreign direct investment between the political risks of using annual data for the years 1984-2019 which might influence Turkey has been tested. For this purpose, Fourier-based unit root and cointegration analysis are used. As a result of the Fourier unit root analysis, it is concluded that the FDI variable is difference stationary and the political risk variable is level stationary. For this reason, Yılancı et al. (2020), a fractional-frequency Fourier bootstrap autoregressive distributed lag (ARDL) boundary test was applied to the literature. This test, which is in nonlinear form, captures smooth transitional changes in long-term relationships. As a result of the analysis, it is seen that there is a cointegration relationship between foreign direct investments and political risk and the variables come to equilibrium in the long run. In addition, it is seen that the calculated long-term coefficient is positive and significant and the error mechanism works correctly in the short term. Therefore, as political stability is achieved foreign direct investment inflows will increase and the economies of the country will gain an advantage in reaching high levels of financial development. As a result, it is concluded that the Weak Partisan model is valid in the Turkish economy.

There is a gap in the existing literature for models linking prices in prediction markets with those for financial markets. We bridge this gap using a model based on the assumption that a binary political event has a constant effect on the difference of the conditional expectations of financial prices, given that event. This leads to a model where returns can be partitioned into a political factor, driven by changes in the likelihood of an election outcome, and a non-political component. Contrary to the existing literature, this model is based on economic principles and applies in a general setting. This model is naturally extended to equities using the Fama-French 5 factors to model the non-political part of returns variance. We test the model for six elections and referendums from the US and UK. Strong support is found for the theory for four events, and weak evidence for one. The remaining election, the 2017 UK general election, does not appear informative for asset prices. An exploration of the political factor loadings reveals pleasing relationships between firm characteristics and political sensitivity. Internationalisation of revenue, location and nationalisation risk are found to be significant. This is consistent with the existing literature, as well as the idea that firms can diversify away from local political risk using offshore sales.

What effect does political instability in the form of a potential secession from a political union have on business formation? Using newly collected data on business creation, we show that entrepreneurial activity in Ireland in the late nineteenth century was much lower than Scotland, and this divergence fluctuated over time. Several factors may have contributed to this, but we argue that political uncertainty about the prospect of a devolved government in Ireland played a role. The effects were most acute in the North of Ireland, the region that was most concerned by potential changes.

This article aims to analyze the contemporary scientific production that relates war to business through an exploratory review of the corresponding literature in which we sought to identify the main research themes and theoretical-empirical contributions on the topic. As a result, it was observed that war entails both risks and opportunities for business, presenting itself as a dichotomous environment: at times propelling, at times repulsive of investments. Another aspect highlighted in this work refers to the dispersion of literature in different areas of knowledge, which has made it difficult to build a research agenda that explores the multifaceted nature of the phenomenon. In that regard, the purpose of this article is to contribute to the articulation of such evidence by generating seven theoretical propositions and an analytical framework to point out research opportunities related to the topic in question.

Political connections provide substantial benefits to firms. We emphasize the ownership of firms as an important channel through which political connections operate and identify a resulting link between political turnover and turnover in the ownership of firms: Political turnover prompts newly politically connected individuals to take, and newly disconnected individuals to cede, ownership of firms. This pattern should be more pronounced in countries with weaker property rights, among firms with publicly recorded owners, and among firms with more immobile assets. Moreover, firms that experience changes to ownership during periods of political turnover should have elevated political connections and therefore pay less taxes and earn higher profits. Analyses of the ownership structure of firms in 87 countries are consistent with the theory. Because politically connected owners allow firms to compensate for other vulnerabilities, the theory also explains mixed findings in prior work on the consequences of asset immobility.

Turkey's relations with the European Union (EU) and the institutions and organizations that constitute the European Union have been and will continue to be one of the most important topics of Turkish politics, Turkish economy and Turkish foreign policy for the last 60 years. Therefore, the effects of relations with the EU on Turkish politics, economy and foreign policy are in the same way indisputable. The main subject of this study is the course of these effects in the Actual Negotiation Process, which is an important milestone in Turkey's relations with the EU and covering the period after 2007 within the full membership negotiations with the EU started in 2005.Both basic macro and micro economic data and some political evaluations made by various international institutions and organizations are considered as important indicators in understanding the economic, financial and political risks that have occurred and/or may occur for countries. In this study, the status of political risk indicators in Turkey's Actual Negotiation Process with the EU has been examined. For the Political Risk outlook, the Governance Indicators published by the World Bank and consisting of six components (Control of Corruption, Efficiency of Government, Political Stability and Violence / Absence of Terrorism, Regulatory Quality, Rule of Law, Freedom of Expression and Accountability) have been examined., Türkiye’nin Avrupa Birliği (AB) ve Avrupa Birliği’ni oluşturan kurum ve kuruluşlar ile olan ilişkileri son 60 yıldır Türk siyasetinin, Türk ekonomisinin ve Türk dış politikasının en önemli gündem maddelerinden birini teşkil etmiştir ve etmeye de devam etmektedir. Dolayısıyla AB ile olan ilişkilerin aynı şekilde Türk siyaset, ekonomi ve dış politikasına etkileri de tartışılmaz olmaktadır. Türkiye’nin AB ile ilişkilerinde önemli bir kilometre taşı olan ve 2005 yılında başlayan AB ile tam üyelik müzakerelerinde 2007 yılı sonrasını kapsayan Fiili Müzakere Süreci içerisinde bu etkilerin hangi seyirde olduğu bu çalışmanın ana konusunu oluşturmaktadır. Gerek temel makro ve mikro ekonomik veriler gerekse de çeşitli uluslararası kurum ve kuruluşlarca değerlendirme konusu yapılan politik bazı değerlendirmeler ülkeler için oluşan ve/veya oluşabilecek ekonomik, finansal ve politik risklerin anlaşılmasında önemli göstergeler olarak değerlendirilmektedir. Bu çalışmada Türkiye’nin AB ile Fiili Müzakere sürecinde politik risk göstergelerinin ne durumda olduğu incelenmiştir. Politik Risk görünümü için Dünya Bankası tarafından yayınlanan ve altı bileşenden oluşan Yönetim Göstergeleri (Governance Indicators: Yolsuzluğun Kontrolü, Hükümetin Verimliliği, Siyasi İstikrar ve Şiddet / Terörizmin Olmaması, Düzenleyici Kalite, Hukuk Devleti, İfade Özgürlüğü ve Hesap Verebilirlik) incelenmiştir.

The COVID-19 pandemic engenders unemployment risks globally and locally. Reflectively engaging in Beck's risk society debates, this paper critically reviews the discursive effects of „risks“ when employed by the government in debates about unemployment insurance since the 1997 sovereignty handover. We break down the concept of risk into four layers: moral risk, financial risk, socio-economic risk and political risk and bring to light the contradictory outcomes that colour the nuanced attitudes among the state, the NGOs and the affected subjects. © 2021 Informa UK Limited, trading as Taylor & Francis Group.

This paper studies a sample of Euro-Mediterranean countries to test the link of political-financial interdependencies. We focus specifically on the impact of the occurrence of national elections on the reaction of financial markets. We used the GARCH (1,1) model and the concept of the volatility multiplier to test our hypotheses. The results established that political elections have a significant impact on stock market performance and volatility for Euro-Mediterranean countries. We detected anomalous behavior in stock market returns. Stock market returns on election day and in the days following the election are inversely higher as uncertainty about the election outcome decreases. Investor uncertainty, combined with the consequences of the multiparty system in Euro-Mediterranean countries, leads to negative abnormal returns around elections. In terms of volatility, we found that the greater degree of uncertainty about the situation and the market disruption affected by the media and social networks increase volatility before election day.

PurposeThis study investigates an under-researched yet fundamental question of how a developed country multinational enterprises (DMNE) perceives and manages political risks when undertaking infrastructure projects in the emerging markets (EMs).Design/methodology/approachThe authors use an abduction-based qualitative research approach to analyze six international project operations of a multinational enterprise originating from Finland in five EMs.FindingsThe findings suggest that the overall nature of political risks in EMs is not the same, except few political risk factors that are visible in most EMs. Consequently, the applied risk management mechanisms vary between EMs, except with few common mechanisms. The authors develop an integrative analytical framework of political risk management based on the findings.Originality/valueThis paper is one of the first studies to identify political risk factors for western MNEs while undertaking international project operations and link them to reduction mechanisms used by them. The authors go beyond the notion of risk being conceptualized at a general level and evaluate 20 specific political risk factors referred to in extant literature. The authors further link these political risk factors with both social exchange and transaction cost theories conceptually as well as empirically. Finally, the authors develop a relatively comprehensive analytical framework of political risk management based on the case projects' findings that combine several strands of literature, including the social exchange theory, transaction cost theory, international market entry, project management and finance literature streams.

The article considers the prospects for developing a methodology for analysing sanctions as a factor of political risks Given the relevance of sanctions as a phenomenon in Russian politics and political science, it is evident that there is a need to measure and manage such a risk factor The development of the methodology considers existing results from other areas of knowledge, including compliance management The author concludes that the indicators of sanctions risk should be selected considering whether the studied country is the object of sanctions or not In addition, the analysis of sanctions is possible both in an independent format and as an addition to existing methods.

To tackle the issue of climate change and environmental degradation debates regarding carbon neutrality is on the rise. Regional Comprehensive Economic Cooperation (RCEP), the leading trading union, covers nearly third of global economy, world population, is responsible for thirty percent of global trade and global gross domestic product. The existent study tests the impact of financial, economic, political, and composite risk on consumption-based carbon dioxide emissions (CCO2) in selected RCEP economies during the period of 1990 to 2020. The empirical analysis consists of cross-sectional dependence, slope heterogeneity, cross-sectional augmented panel unit root test, Westerlund cointegration, second-generation cross-section augmented autoregressive distributed lags model (CS-ARDL), and panel causality test. Further, we explore the role of imports, renewable energy supply, exports, and gross domestic product per-capita on CCO2. The empirical results suggest that the less political risk help to mitigate while the lower financial, economic, and composite risk increase CCO2 emissions in selected RCEP economies. Moreover, exports and renewable energy supply show mitigating effect, whereas imports show upsurge in CCO2. Additionally, a bidirectional causality exists between exports and CCO2, imports and CCO2, GDP per-capita and CCO2, political risk and CCO2, and renewable energy and CCO2 emissions, while a one-way causality from financial risk, composite risk, and economic risk to CCO2. Renewable energy supplies along with the improvement in sub-components of political risk, for instance, corruption, government stability, would help to effectively tackle the issue of CCO2 emissions.

This study examines the role of political risk in deterring China’s trade flow with her 132 trading partners with particular attention to the Association of Southeast Asian Nations (ASEAN) and the Middle East and North African (MENA) countries for 1984-2015 in the Belt Road Initiative (BRI) framework. Using twelve political risk indicators from the International Country Risk Guide (ICRG), we use factor analysis to retrieve three underlying factors: ’Cultural Rigidity,’ ’Governance Failure,’ and ’Partners’ Adverse Feeling.’ After com bining these factors into a dynamic system GMM Gravity equation, we examine their impact on China’s trade flow. As we control for Gravity varia bles and these risk factors, BRI has been found effective for China with MENA countries, ASEAN10, and ASEAN10 þ 3 (China, Japan, and South Korea) but detrimental to trade flow within the ASEAN10 þ 6 (China, India, Japan, S Korea, Australia, and New Zealand) setup. Among the three fac tors, ’Partners’ Adverse Feeling’ is the most substantial deterrent, followed by ’Cultural Rigidities.’ Most of the traditional Gravity coefficients like domestic and partner country’s GDP, domestic and partner country’s per capita GDP, distance, GATT membership of China and Partners, take their right sign and significance. ’Governance failure’ has been found as a signifi cant deterrent neither in ASEAN nor in MENA setup. Therefore, China should strive to improve cultural bottlenecks with her partner countries and improve upon the existing adverse perception in enhancing her trade flow with these countries

Recent studies highlight positive effect of political connections on firm performance and stock returns. This paper shows that the positive effect of political connections on the cross-sectional stock returns disappears in the weak presidency period, defined as the last two years before the presidential party change, or period of low job approval ratings. The extent of the presidential party?s control over the Congress does not affect our main result. The result is driven by small firms, who typically do not have financial resources to hedge away political risks, and by the firms located in the states where residents more strongly support the president. Additional test suggests that the industries that rely on heavy government expenditure use a variety of political strategies to maintain the value of their political capital even during the weak presidency period.

The article analyzes the demographic situation in Ukraine in comparison with European countries. Features, forms of manifestation nd causes of the demographic crisis in modern Ukraine are shown. It is established that the situation with demographic potential is especially critical in Ukrainian society. It is substantiated that the current demographic situation is characterized by depopulation trends, declining birth rates, increased mortality, reduced life expectancy. Among the main factors contributing to the deteriorating demographic situation in the country are economic (low wages and pensions, inflation, constantly rising tariffs for housing and communal services, electricity, gas), social (unsatisfactory housing conditions for young people, high unemployment, deteriorating public health, declining health care), political (political instability, political risks, incomplete changes in the management system, inconsistency of public administration mechanisms with management goals, copying other people's reforms, lack of clear idea and integrated (comprehensive) reform strategy), state- managerial (with solving the problems of self-organization, ie overcoming the inconsistencies of the state of public administration and civil society to the modern world level and the requirements of their organization and functioning, as well as problems of improving the subject-object relations, management regime). The influence of migration processes among young people on the development of society is determined. It is substantiated that the demographic problem is a public administration problem. It is noted that one of the factors in increasing the role of youth in state-building processes and social development is the system of higher education. Public policies (demographic, youth, education) need to be more effective.

PurposeThis paper examines nationalism as a driver of political risk and how it can lead to supply chain disruptions for foreign multinational enterprises (MNEs).Design/methodology/approachConceptual research based on a review of the literature on nationalism and supply chain risk management.FindingsThis research unveils how economic nationalism could engender supply chain disruptions via discriminatory practices toward all foreign MNEs and how national animosity may generate additional risks for the MNEs of nations in conflict with one another. These discriminatory practices include an array of host government and grassroots actions targeting foreign MNEs. While economic nationalism and national animosity emanate from within a host country, they may stimulate geopolitical crises outside the host country and thereby affect the international supply chains of foreign MNEs.Research limitations/implicationsThis research lays the foundation for analytical and empirical researchers to integrate key elements of nationalism into their studies and recommends propositions and datasets to study these notions.Practical implicationsThis study shows the implications that nationalist drivers of supply chain disruptions have for foreign MNEs and thus can help managers to proactively mitigate such disruptions.Originality/valueThis study reveals the importance of integrating notions of national identity and national history in supply chain research, since they play a key role in the emergence of policies and events responsible for supply chain disruptions.

Using the International Country Risk Guide (ICRG) index to represent countries' political risk, the time-varying effect of political risk on copper prices was examined based on the time-varying parameter structural vector autoregression with stochastic volatility (TVP-SVAR-SV) model. The empirical results show that the impact of political risk on copper prices is time-varying and has tended to increase gradually in recent years. There are significant country-level differences in the impact of political risk on copper prices. Political risk has a stronger and longer-lasting impact on copper prices in exporting countries. In terms of risk sources, external and internal conflicts contribute most to international copper price fluctuations in the sample period. The impact of political risk on copper prices reaches an extreme level during the international financial crisis, the European debt crisis, and the election of Donald Trump.

One firm has become emblematic of risk in the deteriorating geopolitical contest between the United States and China. Huawei is a Chinese, and global, leader in next generation telecommunications but is feared by the US and some of its allies as a potential vector of cyber-attacks including espionage and state-directed sabotage, as well as constructing digital standards and infrastructure that will extend Chinese state influence globally. A paradox is that in the absence of trust and international cooperation, firms such as Huawei cannot disprove normative worst-case risk scenarios. The logic of the Huawei paradox threatens decoupling and bifurcation of the world into two rival technological systems, with repercussions for international security, international relations and the international economy. A political risk analysis concludes that the risks originate from geopolitical factors rather than factors specific to the firm and can therefore only be resolved (if there is political will) at the level of global or regional governance with enforceable rules, norms and standards and at the national level with risk avoidance or improved risk management and mitigation measures.

Under the background of "made in China 2025", China's logistics development ushered in new opportunities, which put forward newer and higher requirements for the transformation and upgrading of the logistics industry.The fourth party logistics enterprise is a supply chain integrator.At present, there is a kind of fourth party logistics enterprise based on tripartite cooperation and operation mode in China. That is, fourth party logistics enterprises combine transportation enterprises withinsurance companies, and meanwhile rely on logistics information platform to carry out safety management of freight vehicles. In fact,in the process of tripartite cooperation, there are many uncertain factors, which bring multiple risks to the fourth party logistics enterprises. This paper studies and analyzes the risks faced by the fourth party logistics enterprises, in order to determine the important risk factors, so as to provide decision-making reference for the fourth party logistics enterprises to avoid risks. Firstly, this paper identifies the specific risks in the environment, cooperation, finance and management of the tripartite cooperation model from the internal, external and partnership dimensions, and reveals the mechanism of the risks. Secondly, the analytic hie-rarchy process (AHP) is used to calculate the comprehensive weight of each risk index, and the fuzzy synthetic evaluation method is used to determine the probability of risk. Finally, the overall risk level of X Company is ob-tained by establishing an evaluation matrix and weighting calculation according to the membership relationship between the evaluation matrix and the index weight. The results show that: from the perspective of the dimension of risk importance, cooperation risk and financial risk have the highest risk weight in the second-level index; in the third-level index, the behavioral risk of transportation enterprise, working capital risk and insurance company have the highest risk weight, while the weight of natural risk and political risk is lower. In the dimension of risk generation probability, inter-industry competition risk, transportation enterprise behavior risk, insurance company behavior risk and working capital risk are in the higher probability.

In the view of complexity theory, the emergency behavior of individual is nonlinear and influenced not only by individual variables but also by many other environmental variables. Based on complexity perspective, this article explored why employees’ taking charge behavior occurs in organizations from a multilevel approach. Specifically, this study has explored the cross-level interactive effect of organization-level factor (organizational justice climate and psychological safety climate) and individual-level factor (organizational identification) on employees’ taking charge behavior. Using a total of 806 valid matching questionnaires from 91 firms in China, this study found that first, organizational identification is positively related with employees’ taking charge behavior. Second, distributive justice climate positively moderates the influence of organizational identification on employees’ taking charge behavior. Third, psychological safety climate negatively moderates the influence of organizational identification on employees’ taking charge behavior. According to our results, organizational policies and practices should be made to foster employees’ identification with the organization, to construct a fair environment within the organization, and to convince employees that taking charge behavior will not entail political risks, especially for those employees with low organizational identification.

Este artículo analiza la etapa inicial de la pandemia COVID-19 en México. El objetivo es probar si la percepción del riesgo de contagio y los mensajes de prevención iniciales de las autoridades influyeron en el número de muertes por COVID-19. Estimamos las elasticidades longitudinales de las muertes a los casos confirmados de COVID-19 teniendo en cuenta el error de medición y los problemas de endogeneidad. Encontramos que los casos confirmados y los niveles de pobreza son endógenos. La limitación surge debido a que las muertes por COVID-19 están subreportadas. La contribución es identificar una asociación de la percepción de riesgo individual y político con el número de muertes por COVID-19. Los resultados muestran que los municipios con un mayor porcentaje de personas conscientes de haber estado en contacto con otra persona afectada por COVID-19 tienen menos muertes. Sin embargo, la gestión de la emergencia, tanto federal como estatal, tuvo efectos débiles en la reducción de la tasa de letalidad. Inferimos que una mejor conciencia individual del riesgo es un factor esencial para reducir el número de muertes por COVID-19.

We study the impact of democratic transitions on institutional outcomes. Using an event study method and a sample of 135 countries over the period 1984-2016, we observe that democratic transitions improve institutional outcomes. The effect appears within 3 years after the transition year. The results are robust to alternative definitions of transitions, alternative codings of pre- A nd post-transition years, and changing the set of control variables. We also find that both full and partial democratizations improve institutional outcomes. Transitions out of military regimes or communist autocracies do not. The effect of democratization depends on GDP per capita, education, and the regularity of the transition. Finally, the evidence suggests that the effect is particularly clear on the corruption, law and order, and military in politics dimensions of the index., SCOPUS: ar.j, info:eu-repo/semantics/published

PurposeThe purpose of the paper is to show that order flows determine exchange rate dynamics because they carry information about nonfundamental factors besides macroeconomic fundamentals.Design/methodology/approachTo understand the role of nonfundamental factors in driving order flows, this study uses two approaches. Initially, Evans and Rime (2016) VAR framework is followed to study the incremental information transmitted by order flow compared to macroeconomic variables. Then, the study uses the settings in which Rime et al. (2010) conduct their empirical work, which gives the researcher more latitude in specifying the identity of the factors that drive order flows.FindingsThe findings evidence that order flows explain the dynamics of the TND/USD exchange rate. The results highlight that order flows convey information about technical strategies, the currency systematic factors and political risk. This study also documents the presence of a Ramadan effect in exchange rates and order flows.Originality/valueThis study makes four contributions to the literature. First, it complements the literature on the FX microstructure of emerging markets. The study investigates the information content carried by order flows, while the previous literature has focused solely on examining the explanatory power of order flows to explain exchange rates in emerging countries. The second contribution is that the study demonstrates formally that order flows determine exchange rates because they transmit information about nonfundamental factors. Third, this study is the first to examine whether order flows convey information about technical analysis. Four, the study relates order flow to nontraditional factors that are relevant to the Tunisian FX market.

This paper uses the unexpected launch of the Chinese anti-corruption campaign in 2012 to study the stock market effects of political risk. Political risk is distinct from systematic sources of risk and hence reflected in risk-adjusted stock returns. This case study focuses on the performance of stocks of global luxury goods firms because the anti-corruption campaign primarily affected the business prospects of those firms. Against this background, this paper shows that risk-adjusted returns on stock portfolios consisting of luxury goods firms with high exposure to China shifted persistently downwards after important events associated with the anti-corruption campaign. These risk-adjusted stock returns also co-vary with a proxy of the campaign’s intensity, i.e., the number of senior officials under corruption investigation. Those findings pertain neither to luxury goods firms with low exposure to China nor to firms from other industries with high exposure to China.