A literature review on the impact of political risk on business (Research Paper Sample)

LITERATURE REVIEW: THE IMPACT OF POLITICAL RISK ON INTERNATIONAL BUSINESS
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The Impacts of Political Risk on International Business
Introduction
A series of risks, such as economic and financial risk, impede the perfect operations of international business. However, although the other kinds of risks have been studied quite extensively, most studies have failed to give much attention to political risk, thus resulting in insufficient/lack of data on the subject. Compared to other "country risks," political risks are more critical in nature and much multifaceted in impact. The aspect of political risk is increasingly becoming more noticeable, especially in developing countries. Therefore, the primary task for the review of literature is to analyse our the broad aspect of political risk, along with some of its elements that are deemed to be essential in the empirical studies geared toward international business, including the aspect of Free Direct Trade (FDI), and not only the impact level of political risks on international business but also how it changes over time. In reference to the effects of political risk International Business, the review of literature seeks to address the different approaches by which the diverse lexes of political risks may influence the value of investment opportunities and the decisions of firms to invest in a country. This paper adopts the systematic approach of factor analysis to review the published pieces of literature from 2000 about the effects of political risk on international business. The approach adopted is aimed at reducing the number of variables obtained from the search into their underlying factors.