77 research outputs found

    Political risk and foreign direct investment in Africa: the case of the Nigerian telecommunications industry

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    Foreign direct investment (FDI) flows are expected to be influenced by political risk factors. However, studies that evaluate the relationship between political risk and FDI flows in Sub-Saharan Africa (SSA) are scarce. This study examines the impact of political risk on FDI flows in a SSA context using the 12 political risk components published as the International Country Risk Guide (ICRG) by the Political Risk Services Group (PRS) with the Nigerian telecommunications sector as a case study. The study finds that political risk has a significant influence on the inflow of FDI into developing economies in SSA such as Nigeria and that the 12 components affect FDI in different ways. Irrespective of the political risk rating, a consistent improvement in composite political risk enhances FDI inflow. Among the 12 components, corruption, law and order, democratic accountability and investment profile were found to have significant influences on FDI inflow into the Nigerian telecommunications sector. Corruption, in particular, explains nearly two-thirds of the FDI inflow

    Evaluating the impact of the Extractive Industries Transparency Initiative (EITI) on corruption in Zambia

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    The Extractive Industries Transparency Initiative (EITI) is internationally recognised as a leading anti-corruption scheme, which promotes transparency, accountability and good governance of public oil, gas, and mining revenues. This article provides the first rigorous quantitative investigation of the impact of EITI on corruption in Zambia. Using a case-comparison approach, called the Synthetic Control Method (SCM), we find that the implementation of EITI provoked a significant decrease in corruption in Zambia (with the corruption-reducing effect of EITI being, though, much stronger at the earlier stages of implementation)

    Institutions and equity structure of foreign affiliates

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    Question/Issue: We combine agency and institutional theory to explain the division of equity shares between the foreign (majority) and local (minority) partners within foreign affiliates. We posit that once the decision to invest is made, the ownership structure is arranged so as to generate appropriate incentives to local partners, taking into account both the institutional environment and the firm-specific difficulty in monitoring. Research Findings/Insights: Using a large firm-level dataset for the period 2003-2011 from 16 Central and Eastern European countries and applying selectivity corrected estimates, we find that both weaker host country institutions and higher share of intangible assets in total assets in the firm imply higher minority equity share of local partners. The findings hold when controlling for host country effects and when the attributes of the institutional environment are instrumented. Theoretical/Academic Implications: The classic view is that weak institutions lead to concentrated ownership, yet it leaves the level of minority equity shares unexplained. Our contribution uses a firm-level perspective combined with national-level variation in the institutional environment, and applies agency theory to explain the minority local partner share in foreign affiliates. In particular, we posit that the information asymmetry and monitoring problem in firms are exacerbated by weak host country institutions, but also by the higher share of intangible assets in total assets. Practitioner/Policy Implications: Assessing investment opportunities abroad, foreign firms need to pay attention not only to features directly related to corporate governance (e.g., bankruptcy codes) but also to the broad institutional environment. In weak institutional environments, foreign parent firms need to create strong incentives for local partners by offering them significant minority shares in equity. The same recommendation applies to firms with higher shares of intangible assets in total assets

    PRS Composite, Political, Financial, Economic risk tables for all countries from 1984 through 2013.

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    PRS group's Researchers Dataset. The Researchers Dataset provides annual averages of all of the metrics affecting composite (Table 2B), political (Table 3B), financial (Table 4B) and economic (Table 5B) risk for the period from 1984 through 2013. It covers 140 countries and is very popular among researchers for its ease of use and timelines. PRSgroup.co

    Political risk yearbook

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    "Political Risk Yearbook includes all 100 of Political Risk Services' Country Reports. Published annually, every report in the Yearbook is updated each year to include the latest report for each country, as of December of the previous year." -- from the Publisher

    Political risk yearbook

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    "Political Risk Yearbook includes all 100 of Political Risk Services' Country Reports. Published annually, every report in the Yearbook is updated each year to include the latest report for each country, as of December of the previous year." -- from the Publisher

    Political risk yearbook

    No full text
    "Political Risk Yearbook includes all 100 of Political Risk Services' Country Reports. Published annually, every report in the Yearbook is updated each year to include the latest report for each country, as of December of the previous year." -- from the Publisher
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