IDEAS home Printed from https://ideas.repec.org/a/cbu/jrnlec/y2016v3p123-128.html
   My bibliography  Save this article

Risk And The Foreign Direct Investment - Synthetic Approach

Author

Listed:
  • LAPADUSI MIHAELA LOREDANA

    (CONSTANTIN BRANCUSI UNIVERSITY OF TG-JIU, FACULTY OF ECONOMICS)

  • CIURLAU LOREDANA

    (CONSTANTIN BRANCUSI UNIVERSITY OF TG-JIU, FACULTY OF ECONOMICS)

Abstract

As part of the international economics flows, FDI always puts a mark on the economic development of a country. The internationalization of a company by investments involves a great many risks, from the lowest to the highest level of involvement. On the basis of these considerations one can assess that the country risk is one of the most important pillars that support the process of internationalization of a company by means of foreign direct investments. Broadly sepaking, country risk is an important component of the overall risk of trading on international levels. In other terms it can be seen as the likelihood of losses resulting from a series of macroeconomic (GDP decline on the long run, inflation increase, economic crises, etc.), social (conflicts between social classes, civil wars, riots, etc.) and political events (wars, territorial claims, conflicts of interest, etc.). In order to identify the main country risk factors that influence the decision of corporations to invest abroad, AT Kearney (2004) performed an extensive survery among multinational corporations. Those risk factors that were most frequently mentioned included government regulations (64%), country financial risk (60%), currency or interest rate volatility (51%) and political and social disturbance (46%).[11] The purpose of this article is to highlight a number of important factors that may affect the realization of a foreign direct investment, in other terms to influence "go-no-go" decisions, that is to invest or not to invest. Also, through the analysis of the influence of country risk over FDI one aims at evaluating the relationship between risk and potential gain resulting from conducting the respective business. The purpose of this article is an attempt to identify and develop aspects that outline a number of risk factors of influence over FDI.

Suggested Citation

  • Lapadusi Mihaela Loredana & Ciurlau Loredana, 2016. "Risk And The Foreign Direct Investment - Synthetic Approach," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 123-128, June.
    • Handle: RePEc:cbu:jrnlec:y:2016:v:3:p:123-128
    as

    Download full text from publisher

    File URL: http://www.utgjiu.ro/revista/ec/pdf/2016-03/22_Lapadusi,%20Ciurlau.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gheorghe SAVOIU & Suzana POPA, 2012. "Foreign Direct Investment (Fdi) In Romania," Romanian Statistical Review, Romanian Statistical Review, vol. 60(1), pages 42-56, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Noha Emara & Ayah El Said, 2021. "Sovereign ratings, foreign direct investment and contagion in emerging markets: Does being a BRICS country matter?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5217-5234, October.
    2. Baldan Florentina Cristina & Ungureanu Emilia, 2020. "Foreign Direct Investments In Romania By Country Of Origin, In The 2011-2018 Period," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 13-20, June.
    3. Savoiu, Gheorghe & Dinu, Vasile & Ciuca, Suzana, 2013. "Foreign Direct Investment based on Country Risk and other Macroconomic Factors. Econometric Models for Romanian Economy," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 39-61, March.
    4. Gheorghe Savoiu & Victor Iorga Siman & Constantin Manea, 2015. "A Brief Analysis Of Seasonality in the Romanian Car Market," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 63(7), pages 33-41, July.
    5. Gheorghe SAVOIU & Suzana POPA, 2012. "An Original Econometric Model Of Fdi In Romania," Romanian Statistical Review, Romanian Statistical Review, vol. 60(3), pages 51-63, April.
    6. Florentina Cristina BALDAN & Emilia UNGUREANU, 2020. "Considerations Concerning Foreign Direct Investments In Romania, Period 2011-2019," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 19(2), pages 23-30.
    7. FRATICIU Lucia, 2019. "Considerations Regarding The Relevance Of Direct Foreign Investments In The Global Economy," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 14(1), pages 51-59, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbu:jrnlec:y:2016:v:3:p:123-128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ecobici Nicolae (email available below). General contact details of provider: https://edirc.repec.org/data/fetgjro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.