Journal of Management Research

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Country Risk Analysis


Affiliations
1 Faculty of Management Studies University of Delhi Delhi 110007
2 Adjunct Professor ICFAI Business School Gurgaon, India
     

   Subscribe/Renew Journal


This paper investigates the extent to which economic, political and socio-cultural factors help in country risk assessment. A risk rating model to evaluate the factors determining country risk is formulated. The results of the study show that India represents a high risk country. The economic risk has the highest risk score and political risk has the lowest risk score. However, various investor friendly reforms are on their way and Indias macroeconomic fundamentals and future prospects seem highly conducive for corporate growth.

Keywords

Country Risk, Economic Factors, Political Factors, Socio-cultural Factors, Sovereign Risk, Country Risk Rating
User
Notifications

  • Adbullah, Fuad (1985), Development of an Advance Warning Indicator of External Debt Servicing Vulnerability, Journal of International Business Studies, 3 (Fall): 135-41.

  • Aliber, R. Z. (1980), A Conceptual Approach to the Analysis of External Debt of Developing Countries, World Bank Staff Working paper No. 421, The World Bank, Washington, D.C.

  • Alon, Ilan and Spitzer, John (2003), Does Religious Freedom affect Country Risk Assessment, Journal of International and Area Studies, Vol. 10.

  • Bourke, P. and Shanmugam, B. (1990), An Introduction to Bank Lending, Addison Wesley Business Series.

  • Brewer, T. and Rivoli, P. (1990), Politics and Perceived Country Creditworthiness in International Banking, Journal of Money, Credit and Banking, 22: 357-369.

  • Burton, F. and Inoue, H. (1985), An Appraisal of the Early Warning Indicators of Sovereign Loan Default in Country Risk Evaluation System, Management International Review, 25: 45-56.

  • Burton, F. N. (1987), A Country Risk Appraisal Model of Foreign Asset Expropriation in Developing Countries, Applied Economics, 19(8):1009-1048.

  • Cantor, R. and Packer, F. (1996), Determinants and Impact of Sovereign Credit Ratings, Economic Policy Review, pp. 37-53, Federal Reserve Bank of New York.

  • Cosset, J. C. and Roy, J. (1991), The Determinants of Country Risk Ratings, Journal of International Business Studies, 22: 135-142.

  • Cosset, J., Daouas, M., Kettani, O. and Oral, M. (1993), Replicating Country Risk Rating, Journal of Multinational Financial Management, Vol. 3.

  • Eaton, J., Gersovitz, M. and Stiglitz, J. (1986), The Pure Theory of Country Risk, European Economic Review, 30: 481-513.

  • Erbs, C. B., Campbell, R. H. and Viskanta, T. E. (1996), Political Risk, Economic Risk and Financial Risk Financial Analysts Journal, 52: 28-46.

  • Feder, G. and Just, R. (1977), A Study of Debt Servicing Capacity -Applying Logit Analysis, Journal of Development Economics, 4: 25- 38.

  • Feder, G., Just, R. and Ross, K. (1981), Projecting Debt-Servicing Capacity of Developing Countries, Journal of Financial and Quantitative Analysis, pp. 651-669.

  • Feder, G. and Ross, K. (1982), Risk Assessments and Risk Premiums in the Euro-Dollar Market, The Journal of Finance, pp. 670- 691.

  • Feder, Gershon and Uy, Lily (1985), The Determinants of International Creditworthiness and their Policy Implications, Journal of Policy Modeling, 7: 133-56.

  • Feder, G. and Uy, L. (1985), The Determinants of International Creditworthiness and their Policy Implications, Journal of Policy Modeling, 7: 133-156.

  • Ferri G., Liu L. G. and Stiglitz J. (1999), The Pro-cyclical Role of Rating Agencies: Evidencies from the East Asian Crisis, Economic Notes, Vol. 3.

  • Gur, Timur Han (2001), A Country Risk Assessment Model and the Asian Crisis, Central Bank Review.

  • Hammer, P. L., Kogan, A. and Lejeune, M. A. (2004), Country Risk Ratings: Statistical and Combinatorial Non-recursive Models, Rutcor Research Report, RRR 8-2004.

  • Harvey, Campbell R. and Viskanta, Tadas E. (1996), Political Risk, Economic Risk and Financial Risk, Financial Analyst Journal.

  • Hoti, Suhejla, Snapshot Images of Country Risk Ratings: An International Comparison, Department of Economics, University of Western Australia

  • Howell, L. D. and Chaddick, B. (1994), Models of Political Risk for Foreign Investment and Trade, The Columbia Journal of World Business, Fall: 70-85.

  • Jonathan P. Doh and Ramamurti, Ravi (2003), Reassessing Risk in Developing Country Infrastructure, Long Range Planning.

  • Kaminsky, G. and Schmukler, S. (2001), Emerging Markets Instability: Do Sovereign Ratings Affect Country Risk and Stock Returns? World Bank.

  • Kern, D. (1985), The Evaluation of Country Risk and Economic Potential, Long Range Planning, pp. 17-25.

  • Linder, A. and Santiso, Carlos, Assessing the Predictive Power of Country risk ratings and Governance indicators, SAIS Working Paper Series WP / 02 / 02.

  • Madura, J. (2003), International Financial Management, Mason, Ohio, Thomson, South Western.

  • Meldrium Duncan, H. (2000), Country Risk and Foreign Direct Investment, Business Economics, Vol. 35.

  • Merrill, J. (1982), Country Risk Analysis, Columbia Journal of World Business, Spring: 88-91.

  • Nagy, P. (1979), Country Risk: How to Assess, Quantify and Monitor It, Euromoney Publications, London.

  • Oetzel, Jennifer M. and Bettis, Richard A. (2001), Country Risk Measures: How Risky are They? Journal of World Business Summer, 36(2).

  • Oral, M., Kettani, O. Coset, J. C. and Daouas, M. (1992), An Estimation Model for Country Risk, International Journal of Forecasting, 8: 583593.

  • Ramcharran, H. (1999), The Determinants of Secondary Market Prices for Developing Country Loans: The Impact of Country Risk, Global Finance Journal, 10(2): 173186.

  • Rummel, R. J. and Heenan, D. A. (1978), How Multinationals Analyze Political Risk, Harvard Business Review, pp. 67-76.

  • Saini, K. G. and Bates, P. S. (1984), A Survey of the Quantitative Approaches to Country Risk Analysis, Journal of Banking and Finance, 8: 341-356.

  • Schmidt, R. (1984), Early Warning of Debt Rescheduling, Journal of Banking and Finance, 8: 357370

  • Shapiro, A. (1999), Multinational Financial Management (6th Ed.), Prentice Hall, London.

  • Vij, Madhu (2004), International Financial Management, Excel Books, New Delhi.

  • Vij, Madhu (2005), The Determinants of Country Risk Analysis: An Empirical Approach, Journal of Management Research, 5(1).

  • Vij, Madhu (2005), The Determinants of Country Risk Ratings and their Policy Implications, paper presented at the World Risk and

  • Insurance Economic Congress (WRIEC), from 7th August to 11th August, 2005, at Salt Lake City, Utah, USA.

  • Vij, Madhu (1999), A Conceptual Approach to the Determinants of Country Credit-Worthiness, Finance India, XIII(2). Various Issues of the Euromoney.


Abstract Views: 778

PDF Views: 1




  • Country Risk Analysis

Abstract Views: 778  |  PDF Views: 1

Authors

Madhu Vij
Faculty of Management Studies University of Delhi Delhi 110007
M. C. Kapoor
Adjunct Professor ICFAI Business School Gurgaon, India

Abstract


This paper investigates the extent to which economic, political and socio-cultural factors help in country risk assessment. A risk rating model to evaluate the factors determining country risk is formulated. The results of the study show that India represents a high risk country. The economic risk has the highest risk score and political risk has the lowest risk score. However, various investor friendly reforms are on their way and Indias macroeconomic fundamentals and future prospects seem highly conducive for corporate growth.

Keywords


Country Risk, Economic Factors, Political Factors, Socio-cultural Factors, Sovereign Risk, Country Risk Rating

References