Toward a theoretical development of the concept of corporate political risk

Journal Article · Sun Dec 31 04:00:00 EST 1995 · Journal of Energy and Development

OSTI ID:426155

Cisneros-Lavaller, A ^[1]

---

1. Petroleos de Venezuela S.A., Caracas (Venezuela)

Risk analysis is within the realm of corporate planning. Risk analysis is vitally important for the Petroleum Industry and other natural resource based firms. This paper attempts to develop a theoretical concept that could be coined {open_quotes}corporate political risk.{close_quotes} Stemming from the notions of political risk, country risk, and sovereign risk, the work seeks to portray innovative avenues not only for the characterization of corporate risk but also for indicators that would allow methods to operationalize and measure it. In this analysis, the main features of political risk assessment, its bibliography, and main research methods and techniques will be reviewed. With those elements as background, new theoretical ideas, their conceptualizations and implementation will be advanced in order to identify, quantify, and evaluate corporate political risk (CPR). There are several instances when an investment abroad looks much more attractive than one at home. However, perhaps the most important reason for investing overseas is when the foreign expected rate of return exceeds that offered domestically. Whether for this reason or others, when a corporation begins investing beyond its national boundaries new risks-political in nature-start to emerge. Foreign governmental interference with the operations of the investing firm could be expected, and corporate decision makers confront the potential for eventual politically inflicted damage to their interests.

• OSTI ID: 426155
• Journal Information: Journal of Energy and Development, Journal Name: Journal of Energy and Development Journal Issue: 1 Vol. 21; ISSN 0361-4476; ISSN JENDD2
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
DECISION MAKING
ENERGY SOURCE DEVELOPMENT
INDUSTRY
POLITICAL ASPECTS
RISK ASSESSMENT