The management of political risk

Giambona, Erasmo; Graham, John R.; Harvey, Campbell R.

doi:10.1057/s41267-016-0058-4

Cited by 116 publications

(55 citation statements)

References 39 publications

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“…The most commonly used method to manage GP risk is simply to avoid investments in certain countries. This is chosen by 50% of the respondents (Giambona, Graham, and Harvey, ). There are two standard operating approaches to reducing risk.…”

Section: Details On Risks and Risk Management Policiesmentioning

confidence: 99%

The Theory and Practice of Corporate Risk Management: Evidence from the Field

Giambona¹,

Graham²,

Harvey³

et al. 2018

Financial Management

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We survey more than 1,100 risk managers from around the world regarding their risk management policies. We find evidence consistent with some traditional theories of risk management, but not with all. We then study “why” or “why not” firms hedge and find that almost 90% of risk managers in nonfinancial firms hedge to increase expected cash flow. We also find that 70% to 80% of risk managers hedge to smooth earnings or to satisfy shareholders’ expectations. Our analysis also suggests that regulatory changes implemented to increase market stability (e.g., Dodd‐Frank Act) could discourage corporate hedging. Finally, we provide evidence regarding hedging in six areas of risk: interest rate, foreign exchange, commodity, energy, credit, and geopolitical. We find that operational hedging is more common than financial hedging in all risk areas except foreign exchange.

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Section: Details On Risks and Risk Management Policiesmentioning

confidence: 99%

The Theory and Practice of Corporate Risk Management: Evidence from the Field

Giambona¹,

Graham²,

Harvey³

et al. 2018

Financial Management

Self Cite

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“…how much expected investment return one is willing to give up to avoid additional risks. We demonstrate that experimentation offers a unique means to capture this intuitive formalization of risk propensity, which complements ex post organizational risk measures (Belderbos, Tong, & Wu, 2014) and subjective risk perception (Giambona, Graham, & Harvey, 2017).…”

Section: Introductionmentioning

confidence: 97%

Risk propensity in the foreign direct investment location decision of emerging multinationals

et al. 2017

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“…However, it is generally accepted in the literature that managerial characteristics are critical in a firm's strategic decisions and outcomes. For instance, a number of studies have acknowledged that factors such as individual values (Sousa et al 2010), aversion to risk (Giambona et al 2017), academic level (Ramón-Llorens et al 2017), and international experience (Le and Kroll 2017) play a significant role in explaining firms' international operations. Thus, linking the ability to dynamically change export pricing strategies to the characteristics of the decision maker could provide a fruitful avenue for future research.…”

Section: Limitations and Directions For Future Studiesmentioning

confidence: 99%

Nonlinear Effects of Dynamic Export Pricing on Export Sales: A Longitudinal Investigation

Chen¹,

Sousa²,

He³

2019

Journal of International Marketing

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Little is known in the literature about dynamic export pricing, and particularly how the external environment interacts with a firm’s export pricing decisions and its long-term effect on export sales. Therefore, this study develops a longitudinal framework to examine the quadratic effect of dynamic export pricing and its interaction with customer/competitive turbulence on export sales. By employing product-level longitudinal data, the authors also estimate the lagged effect from past dynamic export pricing and export sales while simultaneously controlling for endogeneity and unknown firm heterogeneity. The results indicate that dynamic export pricing appears to have inverted quadratic effects on export sales; this quadratic relationship is moderated by customer turbulence and competitive turbulence. The authors also focus on the changes of the curve and shifts of the turning point and delineate the fit lines that pinpoint the optimal dynamic export pricing in different export markets. Finally, previous actions and outcomes significantly influence the following year’s export sales, which explains the long-term relationships.

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The management of political risk

Cited by 116 publications

References 39 publications

The Theory and Practice of Corporate Risk Management: Evidence from the Field

The Theory and Practice of Corporate Risk Management: Evidence from the Field

Risk propensity in the foreign direct investment location decision of emerging multinationals

Nonlinear Effects of Dynamic Export Pricing on Export Sales: A Longitudinal Investigation

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