Managerial perceptions of political risk in international projects

Abstract

This paper examines the vulnerability of international projects to political risks. A brief review of the literature on general risks -natural, financial, cultural and political -is undertaken and then a more detailed review of the literature on political risk is presented. It was found that relatively few studies of political risk, particularly in the context of international projects, have been carried out. More particularly the focus has been almost exclusively on developed, rather than developing, countries.Questionnaires were distributed therefore to the entire target population of Jordanian international projects. The findings suggest that the political risk associated with international projects poses a threat to the majority of respondents and that the vulnerability to political risk is related to a firm's degree of internationalisation. International projects are more concerned about host-society and interstate related risks than host-government related risks.

Identifying Political Risk Management Strategies in International Construction Projects

“…Several studies have been conducted to identify political risk events [2,30] and political risk factors [5,6,31] in international construction projects. Although these studies can help international contractors gain a better understanding of political risks in international construction projects, they provide less guidance regarding how to manage political risk.…”

Vol. 2, No. 3, in July 2009

“…For example, in India, political leaders who want to show their concern and careness for local business may not welcome foreigners in an election year. Similarly, basing on a research on Jordanian's international projects, Khattaba, Anchorb and Daviesb (2007). conclude that in Middle East area, international projects are more concerned about "host-society and interstate related risks than host-government related risks".…”

“…claimed that overseas business is facing five types of international risk: natural, societal, legal, political and governmental. Khattaba, Anchorb and Daviesb (2007). contend that political risk, in its wider context, should contain societal and legal risks.…”

“…Political risk includes "inconsistency in policies, changes in laws and regulations, restrictions on fund repatriations, and import restrictions" (Ozorhon et al, 2007).. Political risk is the most obvious risk when projects exposed in international environment (Khattaba, Anchorb and Daviesb, 2007).. Overseas projects normally need to take a few years to complete, but the host country's political leaderships might be changed during that period, this situation will affect overseas project's completion. Moreover, Ling and Hoi (2006).…”

The Role of Export Clusters in Export Performance of SMEs: The Case of Iranian Energy Industry

“…The political and legal risk can be categorized into three different groups of Host Government, Host Society and Interstate/ Regional risks (Al Khattab, Anchor Davies, 2007).…”