Determining Probabilities for a Commercial Risk Model of Czech Exports to China with Respect to Cultural Differences and in Financial Management

Abstract

Certain risks associated with particular human activities cannot be eliminated, with commercial risks representing factors of business success or failure. In the current turbulent environment, proper risk assessment and management is of utmost importance in maintaining competitiveness. The aim of this paper is to present the output of our research which focused on the assessment of commercial risk faced by exporters to China, specifically, determining the probabilities for commercial risk model management. Along with this, the cultural context of the Chinese market influencing risk size are explored, particularly the concepts of tan-wej, kuan-si, li-ťie and mien-c', the effect of which was confirmed by our exporter survey. The research focused on Czech companies exporting goods and technologies to China. The study involves manufacturing enterprises (section C, CZ-NACE Rev. 2) as well as, more specifically, medium and large scale engineering, along with chemical and electrical power companies. Firms exporting common consumer goods, raw materials and recyclables were excluded from the study. The data were obtained from controlled interviews with company representatives (with 58 percent of the exporters participating in a 2013 research) and from Justice.cz (2016) which published economic results of all exporters registered in 2015. The study outcomes were further reviewed in 2016-2017 using follow-up interviews and literature reviews. In collecting the primary data and verifying research outcomes, semi-structured and structured interviews were conducted, following which methods of descriptive statistics and statistical dependence analysis were applied. The findings allow for the construction of a commercial risk assessment model for export to China, involving relative risk costs.

Selected factors of internationalisation and their impact on the SME perception of the market risk

“…This knowledge helps decline lack of success. Furthermore, Polak (2019) states that it is important to understand cultural differences to be effective on international market and minimise risks of company failure. His study was made on Czech companies exporting products to China.…”

Methodology for Assessing the Risk Associated With Information and Knowledge Loss Management

“…Lazaroiu et al (2018) proposed measures to maintain data confidentiality to ensure the General Data Protection Regulation. In researches of risk issues, there are quite popular statistical methods of risk assessment (Hudakova et al, 2018), panel cointegration and causality analysis (Bilan et al, 2020), system dynamics (Jin, 2019), probabilistic methods (Polak, 2019), econometric methods (Bilan et al, 2019d;Mura et al, 2018). Hudáková and Dvorský (2018) proposed assessing the risks in dependence on the rate of implementing the risk management process in the SMEs.…”

Evaluation of the Accuracy of Machine Learning Predictions of the Czech Republic’s Exports to the China

“…On the basis of the results, the author concluded that mixed fuzzy expert system and regression displays higher prediction accuracy. Many other researchers, such as Sidehabi et al (2016) and Polak (2019), used the Adaptive Spline Threshold Autoregression (ASTAR) statistical method, and created a commercial risk assessment model specifically for Czech companies that export goods and technologies to China in order to help them determine future export volumes to the PRC.…”