Instruments of risk mitigation play an important role in managing country risk within the foreign direct investment … (FDI) decision. Our study assesses country risk by state-dependent preferences and introduces futures contracts as a tool … of risk mitigation. We show that country risk assessments related to foreign direct investment do not matter if the …

This paper analyzes the impact of countries' tax attractiveness on the allocation of risk within multinational groups … globally. We show that tax symmetry positively influences the relative amount of risk allocated to subsidiaries. Both time and … decrease the relative amount of risk taken. …

This study investigates whether country risk factors, including political and fiscal budget risk, attenuate the … effectiveness of tax policy tools that aim to encourage corporate risk-taking. Exploiting a cross-country panel, we predict and find … that the effectiveness of loss offset rules and tax rate changes is fully attenuated for firms located in high-risk …

political risk – not just the level of risk – are important for how firms manage political risk. The importance attributed to … political risk by corporate executives has increased over the last 15 years and our results show that political risk is now … considered more important than commodity (input) risk. Our analysis suggests that nearly 50% of firms avoid (not simply reduce …

Measuring the impact of political risk on investment projects is one of the most vexing issues in international … business. One popular approach is to assume that the sovereign yield spread captures political risk and to augment the project … discount rate by this spread. We show that this approach is flawed. While the sovereign spread is influenced by political risk …

The study explores the influence of environmental risk (macroeconomic uncertainty and environmental sustainability risk … environmental risk and FDI with striking varying outcomes. Consistent with the pollution haven hypothesis, the interactions between … governance effectiveness, political stability, regulatory structures and environmental risk suggest that the sub-region is …

firm-level capital investment, risk management, and debt issuance. The effects of uncertainty vary significantly by firm … size. When faced with high price uncertainty, large firms increase their hedging intensity but do not lower capital … investment or debt issuance. In contrast, small firms do not adjust their hedging intensity but significantly lower capital …