The institutionalisation of political risk assessment (IPRA) in Jordanian international firms

Abstract

This paper investigates the determinants of the institutionalisation of political risk assessment (IPRA) within publicly traded international firms in Jordan. The aim is to contribute to the development of IPRA theory by identifying indicators of institutionalisation; by describing and explaining their determinants; and by investigating their relative importance. The paper also represents one of the first studies of political risk assessment of firms in a Middle East context.The study focuses on firm-specific characteristics and extends previous research by investigating firms' size and degree of internationalisation. A survey strategy was adopted and selfadministered questionnaires were distributed to the entire target population of Jordanian international firms. 44 usable responses were obtained (54.9%). Non-parametric statistics were used to test the research hypotheses.The main findings are that the level of institutionalisation of PRA within firms is significantly and positively correlated with a firm's total assets, international revenue and number of operating countries. Of the three significant determinants of institutionalisation, the number of operating countries is found to be the most important. The more countries in which a firm operates, the more likely it is to face significant risks, and so to institutionalise political risk assessment.

Political risk and foreign direct investment in Nigeria: New empirical evidence

“…These studies seeking to classify political risk were able to maintain a connecting line in their quest to draw such basic distinctions without breaking from each other's line of conception. These 173 studies include among others (Al Khattab et al, 2008;Jensen, 2008;Moosa, 2002;Schmidt, 1986). The major outstanding issue that has continued to remain unresolved in the assessment of the FDIpolitical risk relationship is the nature and character of investor preferences of countries that exhibit high market potentials but are marred by greater political risk on investment projects (Agarwal & Ramaswami, 1992) or integrating the basic determinants of FDI with the political risk elements in order to find their effects (Busse & Hefeker, 2005).…”

“…Similarly multinational firms have developed greater interest in the type and character of political risks that are likely to shape their decisions when in a host nation. This is because undeveloped and or modernizing economies have in their character political risks that create some degree of business uncertainty within the transnational political environment especially for foreign investors (Al Khattab et al, 2008) thereby making firms undertake risk assessment. We examine the character of political risk in Nigeria and its likely influence on foreign direct investment inflow using a secondary data from 2000 to 2014.…”

The Risk Management Process in Jordanian Public Shareholding Organisations

“…The systemic risk to organizations posed by recent developments has placed greater demands on both regulators and risk managers (Deloitte, 2009). The literature (e.g., Al Khattab et al, 2008a;Pooser, 2012;Anchor & Benešová, 2012), suggests that the extent to which an organization is involved in risk management is therefore correlated with factors including its size, its degree of internationalization and the sector in which it operates. We use these three…”

“…From the capability perspective, Al Khattab et al (2008a) conclude that larger organizations are more capable of engaging formally in risk management. However, as can be seen from the banking crisis, this theoretical capability does not always translate into practical efficacy.…”

The Effects of Environmental Risk on Consumption: An Empirical Analysis on the Mediterranean Countries

“…Finally, our choice contributes to the innovative nature of this study, since, to the best of our knowledge, few papers in the empirical literature on environmental economics specifically deal with these countries, and none of them tackles the issue of investigating the impacts of environmental risk on consumption for these economies. 1 Beside their geographical proximity, the MED countries are characterized by a long history of cooperation on environmental conservation initiatives (Kagiannas et al, 2003;Gürlük, 2009 Second, our paper provides readers with fresh empirical evidence on the indexes of relative risk aversion and relative prudence, and on the relative preference for the quality of environment for each MED country. Such measures of countries general attitude towards the environment are particularly relevant for the MED economies, since they are strongly heterogeneous in terms of economic development, social and cultural features and environmental conditions.…”