Overview of Political Risks

The concept of political risk was coined in the Anglo-Saxon world in the second half of the last century. This concept focused primarily on risks to foreign direct investment (FDI) in developing and emerging market economies. We broaden the focus to industrialized countries and examine causes and types of political risks in general. Structuring of political risks according to the financial value drivers of the company forms the basis for risk quantification. Finally, we address the economic and business significance of this risk class.