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Countries In Transition And Capital Investment Risk

Author

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  • Šerif Šaboviæ, Vuk Miletiæ

    (Faculty of Economics Pristina in Kosovska Mitrovica; University Union Nikola Tesla, Belgrade)

Abstract

For the majority of international investors, country's risk and sovereignty risk are the greatest risks. Country's risk usually includes political and economic uncertainty. Transition countries are characterized by big budget deficit, inflation, domestic currrency appreciation, inconstant exchange terms, low accumulation, limits and market restrictons. Special risk type is market concentration and monopoly. Other factors increasing foerign capital investment in transition countries are payment risk, market risk, operating risk, off-balance sheet risks, consolidation and convergence, money laundering, off-shore business, inadequate prudential control of banks and other financial mediators, outstanding corruption and criminal. Due to sinergetic action of these factors, transition states may be exposed to the risk of international reputation decrease.

Suggested Citation

  • Šerif Šaboviæ, Vuk Miletiæ, 2014. "Countries In Transition And Capital Investment Risk," Ekonomika, Journal for Economic Theory and Practice and Social Issues 2014-02, „Ekonomika“ Society of Economists, Niš (Serbia).
    • Handle: RePEc:esb:casdrg:2014-213
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    More about this item

    Keywords

    transition countries; country's risk and sovereignty risk; political and economic uncertainty; joint investments; managing foreign investment risk.;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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