ch16countryriskanalysis(国际金融管理,英文版)资料.pptVIP

Country Risk Analysis Chapter Objectives To identify the common factors used by MNCs to measure a country’s political risk and financial risk; To explain the techniques used to measure country risk; and To explain how the assessment of country risk is used by MNCs when making financial decisions. Country Risk Analysis Country risk represents the potentially adverse impact of a country’s environment on the MNC’s cash flows. Country Risk Analysis Country risk can be used: to monitor countries where the MNC is presently doing business; as a screening device to avoid conducting business in countries with excessive risk; and to improve the analysis used in making long-term investment or financing decisions. Political Risk Factors Attitude of Consumers in the Host Country Some consumers may be very loyal to homemade products. Attitude of Host Government The host government may impose special requirements or taxes, restrict fund transfers, subsidize local firms, or fail to enforce copyright laws. Political Risk Factors Blockage of Fund Transfers Funds that are blocked may not be optimally used. Currency Inconvertibility The MNC parent may need to exchange earnings for goods. Political Risk Factors War Internal and external battles, or even the threat of war, can have devastating effects. Bureaucracy Bureaucracy can complicate businesses. Corruption Corruption can increase the cost of conducting business or reduce revenue. Corruption Perceptions Index Online Application Find out more about Transparency International and the Corruption Perceptions Index by visiting /documents/cpi/2001/cpi2001.html. Financial Risk Factors Current and Potential State of the Country’s Economy A recession can severely reduce demand. Financial distress can also cause the government to restrict MNC operations. Indicators of Economic Growth A country’s economic growth is dependent on several financial factors - interest rates, exchange rates, inflation, etc. Online Application What are the polit