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This paper investigates the relationship between political constraint and investor perception of policy risk using an analysis of the reaction of Australian and Canadian uranium company stocks to the Fukushima nuclear disaster in 2011. Our dataset traces 933 projects of 322 uranium firms located across 36 countries and posits a U-shaped relationship between political constraint and investor perceptions of policy risk. Using an event study methodology as applied to the natural quasi-experiment arising from the event, we link heterogeneous changes in stock returns to the policy risk in the uranium project locations of the firms. The results corroborate the expected relationship and hold even after we control for home-country bias. [ABSTRACT FROM AUTHOR]

We use textual analysis of earnings conference calls held by listed firms around the world to measure the amount of risk managers and investors at each firm associated with each country at each point in time. Flexibly aggregating this firm-country-quarter-level data allows us to systematically identify spikes in perceived country risk ("crises") and document their source and pattern of transmission to foreign firms. While this pattern usually follows a gravity structure, it often changes dramatically during crises. For example, while crises originating in developed countries propagate disproportionately to foreign financial firms, emerging market crises transmit less financially and more to traditionally exposed countries. We apply our measures to show that elevated perceptions of a country's riskiness, particularly those of foreign and financial firms, are associated with significant falls in local asset prices, capital outflows, and an increased likelihood of a sudden stop. [ABSTRACT FROM AUTHOR]

Using a large panel of more than 140,000 state-owned enterprises (SOEs), this study examines SOEs' investment behavior surrounding 82 national elections in 25 European countries between 2001 and 2015. We find that SOEs increase their corporate investment by about 29% of the sample average during national election years. This effect is more pronounced in fixed timing and closely contested elections. The effect is also stronger in countries with low institutional quality, more centralized political systems, and state-controlled banking systems. In contrast, we find the matched non-SOEs significantly decrease their corporate investment during national election years. (JEL G18, G30, G32, E22) Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Using a portfolio theory framework, we introduce the concept of "political beta" to model firm-level export diversification in response to global political risk. Our model predicts that firms are less responsive to changes in political relations with lower beta countries—those that contribute less to the firm's total political risk. We document patterns consistent with our model using disaggregated Russian firm-by-destination-country data during 2001–2011: Trade is positively correlated with political relations, though the effect is far weaker for trading partners whose political relations with Russia are relatively uncorrelated with those of other partners in a firm's export portfolio. [ABSTRACT FROM AUTHOR]

Over the past decade, there has been an extremely rapid increase in bilaterally financed infrastructure projects globally, as part of China's Belt and Road Initiative (BRI). The BRI is a broad initiative involving many Chinese state-owned enterprises to develop transport and other infrastructure across the developing world, with bilateral financing from either the China Development Bank (CDB) or the China Export–Import Bank (CEXIM). More recently, many large BRI projects have undergone renegotiations with borrower nations or caused financial distress. This provides a useful opportunity to evaluate the BRI through the lens of the obsolescing bargain model. The obsolescing bargain has historically been used to describe the relationship between multinational corporations (MNCs) and the developing countries they invest in. For large capital investments paid off over a long operating period, such as infrastructure projects, the obsolescing bargain describes a shift in leverage from MNCs to the host nation once the capital investment is complete, often leading to renegotiation or even expropriation. This study examines the BRI through the lens of the obsolescing bargain to evaluate the practices of China's state-owned enterprises (SOEs) and policy banks in mitigating political risk. [ABSTRACT FROM AUTHOR]

How, when, and why does a state take repressive action against individuals residing outside its territorial jurisdiction? Beyond state-led domestic forms of control over citizens living within their legal borders, autocracies also seek to target those abroad—from African states' sponsoring violence against exiled dissidents to Central Asian republics' extraditions of political émigrés, and from the adoption of spyware software to monitor digital activism across Latin America to enforced disappearances of East Asian expatriates. Despite growing global interconnectedness, the field of international studies currently lacks an adequate comparative framework for analyzing how autocracies adapt to growing cross-border mobility. I argue that the rise of global migration flows has contributed to the emergence of "transnational authoritarianism," as autocracies aim to both maximize material gains from citizens' "exit" and minimize political risks by controlling their "voice" abroad. I demonstrate that governments develop strategies of transnational repression, legitimation, and co-optation that transcend state borders, as well as co-operation with a range of non-state actors. Bringing work on the international politics of migration in conversation with the literature on authoritarianism, I provide illustrative examples drawn from a range of transnational authoritarian practices by the fifty countries categorized as "Not Free" by Freedom House in 2019, covering much of Africa, Asia, the Middle East, and South America. I sketch an emerging field of international studies research around the novel means that autocracies employ to exercise power over populations abroad, while shedding light on the evolving nature of global authoritarianism. [ABSTRACT FROM AUTHOR]

We examine how local and global political risks affect industry return volatility. Our central premise is that some industries are more sensitive to political events than others. We find that industries that are more dependent on trade, contract enforcement, and labor exhibit greater return volatility when local political risks are higher. Political uncertainty in countries of trading partners of trade-dependent industries similarly results in greater volatility. Volatility decomposition results indicate that while systematic volatility is associated with domestic political uncertainty, global political risks translate into larger idiosyncratic volatility. [ABSTRACT FROM AUTHOR]

Aim To study association between country of birth and risk of first-onset atrial fibrillation (AF) in first- and second-generation immigrants to Sweden under 45 y of age. Methods The study population included all individuals (n = 3 248 457) under the age of 45 y in Sweden, including immigrants (n = 722 249). AF was defined as first registered diagnosis in the National Patient Register. Association between country of birth and risk of AF was assessed by Cox regression, calculating HRs and 95% CIs, using Swedish-born individuals as referents. All models were stratified by sex, and in different models were adjusted for age, area of residence in Sweden, educational level, marital status, neighbourhood socioeconomic status and co-morbidity(ies). Results A higher fully adjusted HR of incident AF was found in the total sample of first-generation immigrants, 1.44 (95% CI 1.35 to 1.54), in males born in Denmark, Lebanon and Iraq, and in females born in Turkey and Iraq. Lower HRs were found in male and female immigrants from Latin America and Iran, and female immigrants from Finland. Among second-generation immigrants, the fully adjusted HR was significantly lower, 0.70 (95% CI 0.58 to 0.83). Conclusions Clinicians may show a greater awareness of AF in some groups of younger immigrants to enable early diagnosis. [ABSTRACT FROM AUTHOR]

Sovereign defaults are bad news for investors and debtor countries, in particular if a default becomes messy and protracted. Why are some debt crises resolved quickly, in a matter of months, while others take many years to settle? This paper studies the duration of sovereign debt crises based on a new data set and case study archive on debt renegotiations between governments and foreign banks and bondholders. Using Cox proportional hazard models, I find that domestic political instability ('political risk') is a significant predictor of negotiation delays, after controlling for macroeconomic conditions. Government crises, resignations, and street protests are particularly disruptive for a quick settlement process. Overall, the evidence suggests that debtor countries often lack the political ability to resolve a debt crisis. Governments in turmoil are unlikely to exit a default quickly. [ABSTRACT FROM AUTHOR]

The focus of this article is the political economy surrounding the proposed sale of Saudi Aramco. The Saudi power reshuffle has resulted in unprecedented military, financial and political risk taking to carry out the Crown Prince's 2030 vision. This has shattered a long-standing consensual alliance between various tribes and branches of the royal family, which is scrambling to fight back. Examining various valuation scenarios and their drivers, this article argues that the eventual sale would reduce the Kingdom's resource dependence, and end the crowding out of initiatives that are characteristic of endowed richness. Putting Aramco under a global microscope automatically leads to improved legal and geopolitical conditions. Whether Aramco undergoes an initial public offering or backs a debt facility for funding, steps undertaken by the Kingdom have put one foot forward on an irreversible mechanism that will lead to a bigger voice for the burgeoning Saudi middle class that is seeing its time to rise. Delays simply exacerbate the unsustainable status quo. [ABSTRACT FROM AUTHOR]

Four hypotheses were raised concerning the cognitive processes underlying the effects of country-of-origin and specific attribute information on product evaluation. The country of origin not only had a direct influence on product evaluations, but also appeared to stimulate subjects to think more extensively about other product attribute information, augmenting the latter's effect. Hypotheses concerning the influence of country of origin on the interpretation of other product information, the use of country of origin as a heuristic basis for judgments, and the influence of information presentation order were less able to account for the phenomena observed. [ABSTRACT FROM AUTHOR]

Constitutional review, and constitutions more broadly, have been analyzed as providing political insurance for parties who risk declining power. This article develops a typology of risks against which insurance may be useful, and explains how each has its own distinctive institutional implications. It suggests that political elites may seek insurance against three distinct risks--to their power, person, and policies--and that each form of insurance implies somewhat different constitutional choices in terms of the jurisdiction, staffing, and access to courts. Furthermore, the article provides an account as to why insurance may be robust even in the face of downstream political change, addressing a key criticism of the original theory. The key idea is that insurance is more robust when it is "two-sided," that is, consisting of mutual commitments from multiple parties. In this way, the article provides a general account of constitutions as a response to political risk and identifies specific conditions under which constitutions are likely to fulfill the aims or expectations of drafters for effective political insurance. [ABSTRACT FROM AUTHOR]

Existing studies argue that armed conflict reduces foreign direct investment (FDI) or, following rational expectations theory, should not affect FDI. In this paper, I offer a new theory on how armed conflict affects FDI, which encompasses the interaction between political risk and market conditions and provides a systematic explanation for investors' divergent responses including an opportunistic behavior. To do so, I present a formal model focusing on a commodity's price, which is a key to investors' profits and is also influenced by political risk. The model demonstrates that investors do not necessarily reduce FDI against political risk if armed conflict is expected to increase profit by increasing commodity prices, ceteris paribus. Statistical analysis of 50 countries that received FDI in the petroleum sector from 1980 to 2006 reveals that armed conflict (intrastate and interstate) reduces FDI in petroleum. However, it also shows that the effect of armed conflict on FDI in petroleum varies depending on oil prices. Consistent with the predictions, I find that investors do not decrease investment as oil prices get higher. An additional analysis on US FDI in petroleum from 1982 to 2006 also confirms the finding. This insight adds a new dimension to a current debate about the relationship between conflict and FDI. [ABSTRACT FROM AUTHOR]

The article focuses on whether the expropriation risk is to be taken into account for the assessment of damages. Topics discussed include International Centre for the Settlement of Investment Disputes (ICSID) decision in Venezuela Holdings v Venezuela court case; analysis of concept of country risk which encompasses expropriation risk; and relevant principles relating to the assessment of compensation and damages.

Investment arbitrations should not happen too often, because they are costly processes for both parties. Yet they regularly happen. Why? We investigate the hypothesis that investment arbitrations are used as a means of last resort, after dissuasion has failed, and that dissuasion is most likely to fail in situations where significant political risk materializes. Investment arbitration should thus tend to target countries in which highpolitical risk has materialized. In order to test this hypothesis, we focus in this article on two drivers of political risk: bad governance and economic crises. We test various links between these two drivers of risk and arbitration claims. We use an original dataset that includes investment claims filed under the rules of all arbitration institutions as well as ad hoc arbitrations. We find that bad governance, understood as corruption and lack of rule of law (using the WGI Corruption and WGI Rule of Law indexes), has a statistically significant relation with investment arbitration claims, but economic crises do not. [ABSTRACT FROM AUTHOR]

The article focuses on country risk in international investment arbitration. Topics discussed include the claimant investor and respondent state that often diverge on quantum; split of the investor-State tribunals based on the State may violate its foreign investment treaty obligations that should lower damages awards; risk of unlawful State conduct which include expropriation; and International investment agreements (IIA) as means to foster foreign direct investment.

Sellers and buyers of political risk insurance (PRI) ask a simple question about a claimed indirect expropriation: 'Is it covered by the PRI policy?' The answer is far from simple. This article investigates only one PRI coverage-compensation for indirect expropriatory conduct. Numerous definitional issues and uncertainties exist. Investors in energy projects and PRI insurance providers will therefore both benefit from direct and clear discussions about the scope of indirect expropriation cover under a PRI policy before the policy is purchased. [ABSTRACT FROM AUTHOR]

This paper argues that the foreign direct investment ( FDI) data commonly used to test political science theories about FDI often diverge from the theorized about phenomena in ways that can introduce bias and complicate hypothesis testing. I describe some of the key conceptual issues surrounding the quantification of FDI, how commonly used data deals with these issues, and the extent to which those coding rules allow or prevent these data from speaking to political science theories. I show that the empirical relationship between democracy, political risk, and multinational corporations behavior is significantly impacted by 'getting the measure right.' I conclude by arguing that political science theories about FDI speak to such a wide variety of empirically and conceptually distinct phenomena that conflating them as ' FDI' does a disservice to the complexity of the topic. [ABSTRACT FROM AUTHOR]

This article tests systematically the effect of political structures on the credibility of sovereign debtors in advanced economies. It argues that power-sharing and party system polarization have important effects on long-term interest rates. Where collective responsibility is high and polarization is low, the market perceives a more credible commitment on the part of sovereign debtors. These arguments derived from the theory of credible commitments perform much better than alternative accounts of the politics of sovereign debt, namely a market preference for right-wing governments and more flexible polities. The principal data consist of a panel of 23 rich countries between 1970 and 2009. There are tests for robustness to a wider sample and a variety of different measurements. [ABSTRACT FROM AUTHOR]

This article explores whether there is a correlation between the surge in bilateral investment treaties (BITs) in the 1990s and the decline in political risk insurance (PRI) policies issued by public providers such as the Overseas Private Investment Corporation (OPIC), which coincided with BIT proliferation. The central question it addresses is how the availability of rights and remedies which are directly actionable and enforceable against host States has affected, or should affect, demand for public and private PRI in today’s investment environment. The article compares the protective architecture of BITs with that provided by PRI policies, both being risk-mitigation instruments. Drawing on PRI industry reports and survey data, the article also explores to what extent BITs have helped to create an environment enabling private insurers to enter the PRI market. Finally, in light of the steady growth of private PRI providers, the article offers a reassessment of the role of public insurance in the light of today’s political risks, real and perceived. [ABSTRACT FROM PUBLISHER]

Latin America is once again the focus of the Exploration and Production industry’s attention. Despite the perceptions of political risk in some countries, it holds coveted deep water, heavy oil and non-conventional resources; 11 giant fields were discovered between 2008 through 2010 and acquisition and divestiture (A&D) activity exploded by an order of magnitude in 2010, with more than US$30 billion transacted. However, whilst one can observe a steadily growing demand trend, this trend is being confronted with a psychology of scarcity, as oil companies generally have more cash than they are able to deploy for growth, due to high oil prices and lack of opportunities. This article intends to analyse the current state of affairs in production and A&D activity in the Latin American Oil and Gas (O&G) industry in Argentina, Brazil, Colombia, Mexico and Venezuela. Colombia, Perú and Brazil have led in industry focus, and Argentina’s shale resource plays are quickly catching the industry’s attention. [ABSTRACT FROM PUBLISHER]

First Amendment doctrine is at its core about the correct response to the fact that speech can increase the risk of social harm. First Amendment risk varies along several dimensions, including distribution of risk, its magnitude, and the magnitude of social benefit. After describing several cases in which the Supreme Court's assessment risk or harm seems mistaken, I describe the tendency over time for courts to replace doctrine articulated as standards with doctrine articulated as rules with exceptions. I explain why that tendency occurs and can be normatively justified, but that it can produce pathologies when the courts resist, for a variety of reasons, the proliferation of exceptions to the rules. [ABSTRACT FROM AUTHOR]

An introduction is presented in which the editor discusses various papers within the issue on topics including the role of violence in constitution-making, political risks of subversion and political favoritism, and free speech doctrine.

Despite seemingly little prospects and meager results, many developing countries invest substantial resources in regional cooperation organizations. Considering the widespread skepticism regarding the benefits of these organizations, this enthusiasm is puzzling. This study offers an answer to this puzzle and argues that under certain conditions international organizations among developing countries function as a signal of regional peace and stability. In turn, they reduce the political risk associated with foreign investment and increase the inflow of much needed capital to the economies of their members. I evaluate this argument in the context of the Association of Southeast Asian Nations (ASEAN). I show that Indonesia forcefully promoted the formation of ASEAN and that Indonesian foreign policymakers believed that joining this organization will reverse its aggressive and irresponsible image in the eyes of international donors and investors. Evidence regarding political risk and foreign direct investment in Indonesia and other ASEAN members provide additional support for the argument. [ABSTRACT FROM AUTHOR]

Although their paper stresses the potential merits of a particular financial innovation--a form of shared-ownership indexed contract--Miles and Pillonca surprisingly neglect the role of differential surges of financial innovation in explaining cross-country differences in house-price inflation. The risk-reducing potential of their favoured instrument deserves further analysis, not least because of the sizeable political risk involved: the experience of several other countries that have used indexed mortgage contracts shows their limited robustness to macroeconomic shocks. [ABSTRACT FROM AUTHOR]

The objective of this article is two-fold. First, we develop a theoretical model to investigate the impact of political risk on irreversible investment. Second, we apply our model to an analysis of the effects of risk of separation of the province of Quebec from the Canadian federation. We model the probability of a regime switch using the properties of the electoral process and examine the response of investment to changes in the risk of separation. We consider the impact of investors' perception of the risk of separation and financial market volatility separately. We show that political risk has a depressing impact on investment even if the ''bad'' regime has never been observed in the sample. [ABSTRACT FROM AUTHOR]

Changes in sovereign debt ratings and outlooks affect financial markets in emerging economies. They affect not only the instrument being rated (bonds) but also stocks. They directly impact the markets of the countries rated and generate cross-country contagion. The effects of rating and outlook changes are stronger during crises, in nontransparent economies, and in neighboring countries. Upgrades tend to take place during market rallies, whereas downgrades occur during downturns, providing support to the idea that credit rating agencies contribute to the instability in emerging financial markets. [ABSTRACT FROM AUTHOR]