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Unformatted text preview: Increased political risk of choosing wrong partner Greenfield Investment vs. Cross-Border Acquisition Establishing a production or service facility starting from the ground up Cross-border acquisition Quicker and more cost effective Often cause firms to pay too high a price or utilize expensive financing Some developing countries may not be willing to have foregin investment in a local firm Political Risks: Firm specific (microlevel) Business risk, foreign exchange risk, & government risk Country specific (macrolevel) Historical stability, political turmoil, economic stability, & cultural & religious activities Global specific Terrorist threats, cyber attacks, and environment concerns. Political Risk and Corruption Ranking Transparency International publishes a corruption perceptions index International Country Risk Guide rates 22 variables in 3 subcategories of risk (PRS Group)...
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This note was uploaded on 03/10/2012 for the course ACCOUNTING 5450 taught by Professor Brown during the Spring '12 term at Colorado Technical University.
- Spring '12