Risk classification in international trade using methods of cluster analysis.

For an exporter, when exporting goods or services, it is important to know the situation in the countries to which the company wishes to export. Territorial risks can have a significant impact on operations, both in the form of profits and huge losses. To assess such a risk, the exporter may rely on credit insurance companies that regularly evaluate the risks of the given country. All insurance companies attempt to collect quantitative and qualitative data as accurately as possible with the aim of conducting an in-depth analysis of potential risk. However, insurance companies have their own methodologies for evaluating international risks, which may differ according to the organisation. The article applies cluster analysis to the assessment of territorial risk based on the example of OECD countries with the aim of classifying countries according to territorial risk based on selected indices. From a practical point of view, the benefit of the article is the use of the cluster analysis method for the purpose of classifying countries according to territorial risk; it offers exporters another source of information about the country which they are interested in exporting to. From a theoretical point of view, it is beneficial to identify key indices that together represent territorial risk and thus fulfil the general definition of territorial risk. [ABSTRACT FROM AUTHOR]