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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.

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.

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.

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.

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

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.

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.

PurposeThis paper aims to investigate the multi-faceted impact of host country risks on the success of private participation in infrastructure projects. The authors make a distinction between exogenous and endogenous risks, differentiating those that are completely beyond the control of the firm from those in which firms might exert some degree of influence to reduce the negative repercussions.Design/methodology/approachDrawing on logistic regression analyses, the authors analyze a sample of 10,350 private participation in infrastructure projects in 126 countries from 1997 to 2014.FindingsThe authors find that higher levels of exogenous risk are associated with a lower probability of project success, whereas they find no significant effect for endogenous risk.Originality/valueBy pointing to this differential effect, this study makes a contribution to the current debate in the literature on private participation projects.

The private prison industry is a multi-million-dollar industry that has increasingly profited from the detention of undocumented immigrants. As a government contractor, therefore, the industry has a natural interest in government decision making, including legislation that can affect its expansion into immigrant detention. In this article, we examine the relationship between campaign donations made on behalf of the private prison industry and an untested form of position taking—bill cosponsorship—in the US House of Representatives. We hypothesize the private prison industry will reward House members for taking positions that benefit the industry. We also hypothesize the private prison industry will also reward House members who incur greater political risk by taking positions out of sync with the party. To test our hypotheses, we focus on punitive immigration legislation that has the potential to increase the supply of immigrant detainees over the course of eight years. We find support for our second hypothesis, that private prison companies are more likely to reward House Democrats who cosponsor punitive immigration policies even after accounting for possible endogeneity. The findings have important implications regarding the relationship between House members and private interests.

Political risk is prevalent in Nigeria and tends to influence business outcomes and the stability of the banking system. As a result of this study, it was determined whether political risk matters to the performance of the banking sector in Nigeria. The effect of political risk on different banks’ performance measures, such as return on assets, return on invested capital, credit risk and stock price, were examined in a panel of 12 selected commercial banks for the period 2006–2018. Data was analyzed using a two-stage system of generalized method of moments. The results provided evidence that the effect of political risk on bank performance depends on the performance proxies. Specifically, political risk was found to be negatively related to banks’ returns on invested capital and positively related to deteriorating credit risk. Hence, it can be concluded that political risk induces poor banking system performance in Nigeria. The study provides a critical insight into the management of a country’s political systems in terms of their potential to create unfavorable conditions for banking systems to thrive.

The worrying welfare and political risks of expanding informal economies have put concerns about economic inclusion at the heart of contemporary development thinking — concerns further intensified in the wake of the COVID‐19 pandemic. Amid a collective ‘will to include’, this Debate adopts an infrastructural lens to decipher the distributive and governance implications of the complex institutional, financial and digital linkages through which informal workers and consumers are being included in the circuits of contemporary market economies. Looking beyond imaginaries of seamless linkages, the articles in this Debate examine the specific processes through which these inclusive connections engage with informal actors, focusing on how they work and for whom. Articles focus on various types of inclusive infrastructures that connect deprived communities to jobs, resources and social citizenship, ranging from social protection systems to employment linkages and services for hard‐to‐reach populations. With a view to cutting through the ideological blurring of inclusive discourses, this Introduction will examine the strategies of legibility and regulatory restructuring effected through inclusive infrastructures. It reveals the hidden politics of inclusive linkages, reflects on the techniques of governance operating through socio‐technical connections, and examines processes of resistance and failed connections reworking inclusive infrastructures from below. [ABSTRACT FROM AUTHOR] Copyright of Development & Change is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Although clinical ethics scholarship and practice has largely avoided assuming an activist stance, the many health care crises of the last eighteen months motivated a distinct change: On listserves, in blog postings, and in published essays, activist language has permeated conversations over such issues as the impact of triage policies on persons with disabilities and of color, and how the health care system has historically failed African Americans. In this paper, I defend this turn, arguing that clinical ethicists should embrace activism-generally, and with particular emphasis on institutional, mesolevel concerns. Ethicists are often uniquely situated to understand the structural factors that regularly motivate clinical ethics cases, and they are often in a privileged position to be effective change agents. In making this case, I also stress the need not to overstep one's skills and to be acutely cognizant of the political risks associated with such work.

Purpose The principles of value investing present an alternative way to strategically approach the challenges and opportunities generated from the global risk landscape. Design/methodology/approach The principles of value investing – based on the lessons learned from highly successful practitioners – can be distilled into six core managerial considerations. Findings In theory, the prescriptions of value investing appear straightforward, but executives need to augment their skillsets with those of both an astute investor and discerning banker, balance their attention between conventional and non-traditional sources of information, and exhibit the patience and grit to go against the herd and focus on longer-term compounded returns. Practical implications The concept of “rationality” is a way of monitoring executive behavior to ensure that stated goals, objectives and strategies reconcile to business actions over time. Originality/value Insights for corporate leaders, investors, M&A teams and activists. These six principles will likely be increasingly valuable during the challenging times ahead: Adding cost-effective resource allocation to the strategy tool kit. Conservative financing. Balancing non-traditional and traditional information. Clarity about the complexity of risk. Humility in times of uncertainty. Focusing on compounded returns.

Widespread political and economic changes over the past several decades have influenced MENA insurance firms’ business environment fundamentally. This study investigates the influence of business environment, political risk, governance and Shariah compliance on efficiency in the insurance market from 2007 to 2017 using unbalanced panel data from 125 listed insurance firms across MENA countries. The study emphasises that a less favourable business environment exerts pressure on insurance firms and also identified an improvement in efficiency over the sample period, which may be attributed to the role played by challenging business conditions in increasing efficiency. Further, the results showed that variability in general economic conditions and influence of governance indicators explain efficiency, while solvency has a multifaceted effect on efficiency. Finally, the study found that Islamic insurance’s relative failure to enhance efficiency may be attributable to its failure to establish a distinct identity or draw a clear line between its mode of operation and that of conventional insurance, as well as the issue of customer confidence. Overall, the study emphasises the importance of controlling business environmental conditions in cross-country efficiency studies.

This article argues that so-called “development” strategies based on natural resource extraction make the national state vulnerable to a de facto process of constitutional change. It develops a new...

Exploiting a novel measure of firm-level political risk based on earnings conference calls, we explore the effect of political exposure on corporate social responsibility (CSR). We show that firms more exposed to political risk invest significantly more in CSR activities. This finding is consistent with the risk-mitigation hypothesis, which posits that CSR produces moral capital that safeguards the firm in case of a negative event. Hence, firms exposed to more political risk engage in more CSR activities to take advantage of its insurance-like effect. An increase in political exposure by one standard deviation raises CSR engagement by 27.95%.

Promotion of domestic companies interests abroad is the main task of economic diplomacy. Promotion of domestic goods and services in foreign markets ensures the coun- try's stable position in the world economy and economic stability within the state. Following economic boost, world trade and especially export growth may ensure not only country's economy growth, but also citizens welfare through mechanisms for reallocating funds. Value-added exports development in Russia has been brought to the rank of one of the key government goals. Russia has an export promotion institutions system. Some institu- tions have long history. Others have been created recently and based on foreign practices. The Russian government has developed the national project "International cooperation and export", it sets the goal to ensure export growth through effective interaction of existing institutions. The article reviews the foreign and domestic practices of export support through financial and non-financial instruments. They include market analysis tools, exhibition support, popu- larizing exports within the country, various export credit and insurance instruments pro- tecting the exporter from political risks in foreign markets. Author analyzes the legislative framework of key support measures and possible ways to improve efficiency by eliminating duplication in various institutions functions. It should provide a synergistic effect boosting their efficiency. The methodology of the study is based on a comprehensive analysis of the modern export promotion institutions system in Russia and abroad, a regulatory analysis of fundamental documents and a comparative analysis of export support measures. The extensive research subject has provided the usage of an interdisciplinary approach covering economic and po- litical research.

Private investment in Africa represents access to a different source of growth and investment returns than is typically included in institutional portfolios. Investment risk and returns available in Africa must be considered in the context of differences with global developed markets, including leverage at the portfolio and fund level, prevalence of portfolio company ESG program implementation, access to the full universe of opportunities, and underlying drivers of growth. Investors often overlook this region due to a lack of familiarity with these differences and common concerns, including political risk, currency exposure, corporate governance, and ultimate generation of competitive returns with the required scale. Private investment in Africa can benefit from economic growth opportunities and underlying trends, including population growth, urbanization, and increasing regional trade, specific to the region. An investment strategy appropriate to the region is essential to realize the potential of private investment opportunities in a risk-controlled manner. TOPICS:Private equity, frontier markets, risk management, performance measurement Key Findings ▪ Private investment in Africa can benefit from economic growth opportunities and underlying trends, including population growth, urbanization, and increasing regional trade, specific to the region. ▪ Investment risk and returns available in Africa must be considered in the context of differences with global developed markets, including leverage at the portfolio and fund level, prevalence of portfolio company ESG program implementation, access to the full universe of opportunities, and underlying drivers of growth. An investment strategy appropriate to the region is essential to realize the potential of private investment opportunities in a risk-controlled manner. ▪ Private investment in Africa can be made at attractive absolute and relative (to developed markets) valuations in a risk-controlled manner and is worth serious consideration by institutional investors.

PurposeMany multinational corporations that originate from emerging economies (emerging market multinational corporations (EMNCs)) opt for acquiring a target firm in a developed market to expediently upgrade their strategic capabilities. To successfully achieve their strategic goals in the developed markets, EMNCs may use market actions and nonmarket actions to mitigate the potential risk derived from the national political differences between their home emerging economy and host developed economy. This paper aims to extend the legitimacy-based view of political risk to study the influence of political animosity – defined as misalignment of the host-home countries’ national interests – on the EMNCs’ market and nonmarket strategy in a developed market.Design/methodology/approachIn this paper, we examine all EMNCs that made cross-border acquisitions of the USA targets from 2005 to 2011. The final sample consists of 252 acquisitions originating from 25 emerging markets. This paper used Tobit regression analysis to test the direct and moderating hypotheses.FindingsFacing a high level of political animosity between their home country and the host developed economy, EMNCs use a market strategy by acquiring less ownership stake in the developed market, as well as engage in a nonmarket strategy by increasing lobbying activities. In addition, because of the heightened legitimacy concerns of developed market shareholders, cross-listed EMNCs have a greater tendency than non-cross-listed EMNCs to improve their legitimacy through their market and nonmarket strategy.Originality/valueThe current paper sheds light on EMNCs’ international strategy in developed markets by examining both market and nonmarket actions. EMNCs are shown to be strongly motivated to engage in acquisitions in developed markets so they can acquire invaluable strategic resources, such as brands and distribution channels, to compete with the developed market multinationals. A sophisticated ownership strategy and corporate political activities are invaluable for EMNCs to catch up with developed market multinationals.

The postwar environment is different from those of active war and established peace, with risks of violence and political volatility existing alongside renewed commitments to stability and development. International aid organizations join governing institutions in guiding policies for postwar growth. Though investments here are risky, I argue that governments can clarify key uncertainties and accelerate the process of recovering FDI by strengthening policy in areas of information transparency, governing accountability, and engagement with international aid. These ideas are tested with a survival analysis of inbound FDI recovery using a worldwide sample of postwar periods from 1970 to 2008. I find that while transparency and accountability accelerate FDI recovery as expected, foreign aid tends to be associated with slower rates of recovery. Rather than encourage postwar FDI with a commitment to development, aid may be an indirect signal that the environment is yet unfit for private sector investment. Policymakers and aid organizations should not rely on aid alone to attract foreign investment in postwar environments. Structures that encourage investment for social responsibility, with a long-term market outlook, may be more successful in these contexts.

This study aims to determine the risk of policies, company-specific characteristics that have an impact on the behavior of marine company financing in Indonesia. Samples were obtained using purposive sampling and obtained 16 samples of Marine companies that were Listed on the Indonesia Stock Exchange in the 2015-2018 Period. The data in this study were processed using the Stata 14.0 application. And the estimation method in this research is to use the random effect method. The results of this study for the independent variable risk policy consisting of EPU (economic policy uncertainty) and GPR (political risk) do not affect all types of funding, both debt, capital and actual financing. While the independent variable IOS has no significant effect on the three types of financing used, and cash flow variable has a significant effect on debt financing and actual financing while capital financing does not. Sales growth has a significant effect on the type of debt financing at alpha 5%, while actual financing has a significant effect on alpha 10% and has no effect on capital financing.

Drawing on human capital theory, this paper develops a contingency approach to explore how independent directors’ scarce human capital affects innovation investment intensity and innovation outputs in the Chinese context. Controlling for the presence of ordinary technical independent directors (TIDs) and a range of other factors, we find that academy fellow independent directors (AFIDs) have an incremental positive effect on innovation investment intensity and innovation outputs, and that this effect exists only for non–state-owned enterprises (non-SOEs), which are more constrained in their ability and resources to pursue value-enhancing innovation activities. Our channel analyses suggest that AFIDs play a strong resource provision role in enhancing innovation. However, their positive role in promoting impactful innovation activities diminishes when they face intensified government intervention and political risk. We clearly document that regulations that are designed to impose only intense external monitoring of independent directors may have unintended negative consequences on innovation, particularly when firms’ demands for resource provision are intense, as is the case with firm innovation.

This study was focused on the impacts of firm heterogeneity and political risks of destination countries on China’s OFDI firms. A sample of 538 Chinese manufacturing firms investing in ASEAN countries are investigated from year 2005 to year 2013. Factors indicating firm heterogeneity as total assets, sectors of investment, location, operating experience, OFDI experience and export status are applied, while factors as political stability and government effectiveness of destination countries are applied, and economic environment as openness, market size, level of affluence of residents and labor size of destination countries are used as control variables. Findings show that assets level is an important factor for OFDI firms’ performance, and China’s OFDI firms investing in ASEAN countries have presented a risk preference.

The most challenging problem in today’s world is food insecurity, an estimated approximately 832 million people around the world suffer from a lack of adequate and healthy food on a regular basis for their life. This problem is likely to intensify around the world due to high political risk and weak institutions. Hence, this study utilizes the country-level data, covering 124 countries in Asia, Africa, Europe, Latin America, and the Caribbean between 1984-2018 to examine the impact of political risk and institutions on food security, proxied by Dietary energy supply (DES). We have finalized the System-GMM from Pooled-OLS, Fixed-effect, Difference-GMM, and System-GMM, to recover the potential endogeneity and unobserved heterogeneity of the independent variables. Our outcomes provide supportive evidence that internal and external conflicts, socioeconomic conditions, corruption, military in politics, religious tensions, ethnicity tensions, and poor quality of bureaucracy worsen food security in developed and developing countries. While government stability, the role of law and order, democratic accountability, and investment profile affect the food supply positively and significantly.

PurposeThe purpose of this paper is to develop and test theory-driven hypothesis on trade costs’ effect of logistics performance (LP) and bureaucratic efficiency, primarily from SAARC (South Asian Association for Regional Cooperation) perspective.Design/methodology/approachThe paper develops hypothesis based on the review of the literature and theory linking LP, trade costs and institutions. The authors test the hypothesis using secondary data sources: World Bank-UNESCAP trade costs database, World Bank Logistics Performance Index (LPI) and Political Risk Service's Political Risk Rating. Fixed-effect approach is used to test the hypothesis.FindingsThe influential role of bureaucratic quality on relationship between LPI and South Asian trade costs (inter-SAARC and intra-SAARC) is evident. The results also point out that bureaucratic quality also conditions the effect of different dimensions of LPI on South Asian trade costs. Further, it is found that bureaucratic inefficiency mitigates the effects of LPI on South Asia's trade costs with its proximate trading partners APEC (Asia–Pacific Economic Cooperation) and ASEAN (Association of Southeast Asia Nations).Research limitations/implicationsThe analysis is conducted using short span of data. With the availability of long span of data, the understanding of the relationship studies in this paper will improve.Practical implicationsThe results suggests policymakers to improve bureaucratic efficiency for utilizing the full potential effect of LPI in deceasing trade costs. The study inspires businesses to act and advocate in favor of reforms in governance system.Originality/valueThis paper is among the first, which investigates the possibility that the relationship between LPI and trade costs depends on the bureaucratic efficiency. It provides a more detailed description of the LPI-trade costs relationship.

Motivation Reform coalitions represent a potential means for donors to support macro‐political reform in developing countries, enabling them to avoid the limitations of micro‐political or public sector reform where appropriate circumstances exist. Donor support for reform coalitions, however, is difficult to engineer and fraught with political risk, including the risk of partisan taint. Purpose This article therefore explores the efforts of Australian Aid and the World Bank to promote reform coalitions and constituencies in the Philippines during the presidency of Benigno S. Aquino III (2010–2016) and to institutionalize the reform agenda of his administration. Approach and Methods It draws on a range of sources including programme design documents, mid‐term and end‐of‐term reviews, and contextual policy documents. It also draws on economic and governance data sets to explore relevant correlations. Findings It finds that second‐generation reform coalitions brought together stakeholders from government, the private sector and civil society and promoted economic and other reforms. These donor strategies arguably failed, however, with the election of Rodrigo Duterte in May 2016. He was critical of Aquino’s record in office and ostensibly committed to reverse engineering many of the Aquino administration’s achievements. The article critiques a governance‐centric explanatory chain of causation and proposes an expanded politics‐centric chain. Policy Implications In conceptual terms, planning of reform coalition activities must better account for dominant coalitions and the political settlements which they underpin, and must set out explicit theories of change, specifying distinct political pathways to change. In operational terms, donors must work to avoid traditional “transactional” relationships in favour of more innovative “transformative” ones and must balance “strategic opportunism” with strategic retreat and adaptation where necessary.

The present research article shall outline how blockchain solutions could be combined with insurance solutions against political risks (PRI). Through the definitions and the characterization of the key concepts of traditional insurance law and blockchain technology using possible case examples of specific political risks, it will be shown, how the insurance coverage of political risks could be achieved through smart insurance contracts or other blockchain solutions in the future.

The article deals with political risks and barriers of digitalisation. Initially, the author identified the factors of political risks and barriers to digitalisation. They include the limited state categorisation and the complexity of the institutional process, lack of investment in human capital and low overall factor productivity, lack of effective and sufficient communication, resistance to bureaucracy. On the base of these factors, the main political risks and barriers to digitalisation include (1) the formal declaration of reforms in the absence of real results, (2) the growth of centralised control and the adverse social reaction, (3) the increasing of social inequality and the formation of the new monopolies, (4) the risks of cybersecurity. Management of these risks is possible through the development of adequate institutional design, the use of new organisational solutions to stimulate the development of human capital, the establishment of the institute of the scientific and technical expertise, support of project finance for ICT projects, support of sufficient political communication.

The article analyses the level of food security of the Russian Federation as a determinant of political risk in the agricultural sector of the country. The author presents calculations of indicators of ensuring food independence of the Russian Federation on priority types of food products; assesses the level of import dependence of the agricultural sector; regards the dynamics of personal food consumption in the country. The author notes that at present, the domestic agricultural complex operates in conditions of constant economic and geopolitical transformations. It directly affects the emergence and growth of political risk in this sector of the economy. Sanctions imposed on Russia by Western countries since 2014 predetermined the direction of development of the agricultural sector of the Russian Federation and revealed the need for thinking long-term and systemic solutions from the state in the field of import substitution and improving the quality of life of the Russian population.

Social media has arguably shifted political agenda-setting power away from mainstream media onto politicians. Current U.S. President Trump’s reliance on Twitter is unprecedented, but the underlying implications for agenda setting are poorly understood. Using the president as a case study, we present evidence suggesting that President Trump’s use of Twitter diverts crucial media (The New York Times and ABC News) from topics that are potentially harmful to him. We find that increased media coverage of the Mueller investigation is immediately followed by Trump tweeting increasingly about unrelated issues. This increased activity, in turn, is followed by a reduction in coverage of the Mueller investigation—a finding that is consistent with the hypothesis that President Trump’s tweets may also successfully divert the media from topics that he considers threatening. The pattern is absent in placebo analyses involving Brexit coverage and several other topics that do not present a political risk to the president. Our results are robust to the inclusion of numerous control variables and examination of several alternative explanations, although the generality of the successful diversion must be established by further investigation., By analyzing President Trump’s tweets and data from two media sources, the authors provide evidence suggesting that when the media reports on a topic potentially harmful to the president, he tweets about unrelated issues. Further evidence from this case study suggests that these diversionary tweets may also successfully reduce subsequent media coverage of the harmful topic.

Resource nationalism, political disputes between national and local authorities over revenue sharing, and insecurity, are common country level political risks in Africa's oil and gas industries. But the boom decade gave new significance to regional risk. High international oil prices between 2004 and 2014 incentivized exploration and development in frontier countries and led to new oil and gas discoveries across the continent. In East Africa, regional cooperation and cross-border pipeline infrastructure is necessary to monetize landlocked resources far from large consumer markets. This article examines how oil and politics produce regional risk to influence the competitive positions of international oil companies and development of oil industries in South Sudan, Uganda, and Kenya. It shows how international oil companies harness market and political resources to manage and mitigate not only country level risks, but also to shape regional affairs to advance their competitive positions.

Using a dataset of 7757 firms in Brazil, China, India, and Russia from 2009 to 2014, this article examines the effect of political risk variables on financial flexibility and the effects of financial flexibility on future firm value, capital investment, cash holdings and the probability of default while controlling for firm-level effects and political variables. Effective representation of the majority is found to be associated with a higher level of financial flexibility. In terms of the effects of financial flexibility on firm value, results that are much stronger than previously reported are found. However, unlike previous work, the current research does not find that increased financial flexibility leads to increased capital expenditures. It is found that financially flexible firms in these countries lower their probability of default on average by about 0.6 %. It is also found that giving greater voice to the majority and greater adherence to the rule of law adds to the value of firms.

In recent years there has been a steady growth of “multi-bilateral aid,” or voluntary earmarked contributions transferred by international donors through multilateral organizations. The World Bank Group’s financial intermediary funds (FIFs) and trust funds have gained an especially wide recognition and have been particularly instrumental in channelling aid to fragile states - a priority group of partners for achieving the United Nations’ sustainable development goals. But researchers have paid much less attention to FIFs than to trust funds.This article identifies characteristic features of World Bank IFIs as a multilateral mechanism to channel aid to politically unstable regions, focusing on the Middle East and North Africa Transition Fund (MENA TF) established in 2012 to support Arab countries undergoing political transitions as a result of the Arab Awakening. The introductory section examines the particularities, benefits and risks of establishing FIFs as multilateral mechanisms to transfer development assistance. These parameters are illustrated in subsequent sections which discuss the MENA TF’s establishment procedures, governance structure, and mobilization and allocation of funds.The article concludes that for each of the parties involved, hypothetically, World Bank FIFs are a quite convenient mechanism for supporting fragile states. However, the example of the MENA TF conclusively shows that everything depends on the concrete political context of their establishment and operation. In terms of some key parameters (establishment procedure, governance structure) the MENA TF mechanism is very similar to other funds of the same type, but its operation is strongly affected by challenges uncommon to the majority of FIFs, which are focused on more politically neutral sectors. These challenges stem from several factors, including the predominance of political decisions within the Deauville Partnership, a unique list of contributors, and a severity of discord among them given the drastic deterioration of the political climate in the Arab world and beyond in 2014. This not only disrupted plans to engage more donors and mobilize the planned amount of funds, but it also stipulated a visible politicization of aid allocation. Political risks which materialized in the MENA TF operations might occur in other FIFs focused on fragile states and situations. The establishment of additional multilateral mechanisms, thus, requires learning from experience and prioritizing risk assessment and mitigation.The reported study was funded by the Russian Foundation for Basic Research according to the research project No 17-37-01018-OGN.