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Political Risk Insurance: A New Firm-level Data Set

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  • Vincent Arel-Bundock
  • Clint Peinhardt
  • Amy Pond

Abstract

When do governments impose costs on foreign firms? Many studies of foreign direct investment focus on incentives for government expropriation, but scholars are often forced to rely on indirect measures of expropriation to conduct empirical analyses. This article introduces a data set which includes information on over 5,000 political risk insurance contracts issued by the US Overseas Private Investment Corporation since 1961, and on all the claims filed by investors under these contracts. These detailed insurance data allow us to study the determinants of foreign investors’ losses from a variety of sources, including expropriation, inconvertibility, and violent conflict. To illustrate the benefits of these data for hypothesis testing, we adopt a comprehensive empirical approach and explore both shared and distinct causes across risk categories.

Suggested Citation

  • Vincent Arel-Bundock & Clint Peinhardt & Amy Pond, 2020. "Political Risk Insurance: A New Firm-level Data Set," Journal of Conflict Resolution, Peace Science Society (International), vol. 64(5), pages 987-1006, May.
    • Handle: RePEc:sae:jocore:v:64:y:2020:i:5:p:987-1006
    DOI: 10.1177/0022002719875754
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    1. Chunfang Cao & Xiaoyang Li & Guilin Liu, 2023. "Does geopolitical risk matter for corporate investment decisions? Evidence from cross‐border acquisitions," Economics and Politics, Wiley Blackwell, vol. 35(3), pages 665-695, November.

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