Managing International Risk Book contents
- Frontmatter
- Contents
- List of contributors
- Acknowledgments
- Introduction and overview
- 1 Managing risks to the international economic system
- Perspective: Political threats to the international economic system
- Perspective: The crisis of exogeneity, or our reduced ability to deal with risk
- 2 Country risk: economic aspects
- 3 Political risk: analysis, process, and purpose
- 4 Country risk: social and cultural aspects
- Perspective: The risks of lending to developing countries
- Perspective: Country risk, a banker's view
- Perspective: Managing country risk for a manufacturing corporation
- 5 Organizational and institutional responses to international risk
- Perspective: Organizational strategies for coping with country risk
- 6 Insuring against country risks: descriptive and prescriptive aspects
- Perspective: Country risk insurance, an insurer's view
- Index
6 - Insuring against country risks: descriptive and prescriptive aspects
Published online by Cambridge University Press: 07 May 2010
- Frontmatter
- Contents
- List of contributors
- Acknowledgments
- Introduction and overview
- 1 Managing risks to the international economic system
- Perspective: Political threats to the international economic system
- Perspective: The crisis of exogeneity, or our reduced ability to deal with risk
- 2 Country risk: economic aspects
- 3 Political risk: analysis, process, and purpose
- 4 Country risk: social and cultural aspects
- Perspective: The risks of lending to developing countries
- Perspective: Country risk, a banker's view
- Perspective: Managing country risk for a manufacturing corporation
- 5 Organizational and institutional responses to international risk
- Perspective: Organizational strategies for coping with country risk
- 6 Insuring against country risks: descriptive and prescriptive aspects
- Perspective: Country risk insurance, an insurer's view
- Index
Summary
Introduction
Multinational firms face grave uncertainties today with respect to their investment strategies that involve other countries. In particular, there has been an increasing awareness by international managers of the difficulty of predicting the future political and economic climate likely to exist in a foreign country. One only has to look at the following headlines from The Economist during the first few months of 1981 to see graphically the types of uncertainties that exist in different parts of the world:
Iran and Iraq: A New Front in a Slow War? (January 3, 1981)
El Salvador: Final Offensive to the Next? (January 17, 1981)
Ecuador and Peru: The Oil War (February 7, 1981)
Poland: A Shaky Kind of Peace (March 21, 1981)
Arab-Israel Conflict: Steam from the Middle East's Back Burner (March 28, 1981)
These illustrative examples of the unstable world situation coupled with the continuing interest by multinational firms in investing abroad have motivated two broad questions that this chapter addresses: (1) How do multinational firms and insurers deal with the problems of international risk in making their decisions as to what investments to undertake in foreign countries? (2) What role can analytic approaches, including insurance mechanisms, play in better managing risk and uncertainty in international transactions?
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- Chapter
- Information
- Managing International RiskEssays Commissioned in Honor of the Centenary of the Wharton School, University of Pennsylvania, pp. 223 - 255Publisher: Cambridge University PressPrint publication year: 1983