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Country Risk – Barrier or Key Factor of Globalization


  • Elena-Mihaela ILIESCU

    ("Titu Maiorescu" University, Bucharest, Romania)

  • Marilena CIOBANASU

    ("Titu Maiorescu" University, Bucharest, Romania)


Country risk and globalization are two terms that at first sight may seem incompatible, globalization meaning opening, expansion of international economic relations, while country risk indicator generates limits or adjustments for the external activities. The present scientific approach aims to demonstrate, both theoretically and empirically, the complementarity, the positive correlation between the two terms. Briefly, all studies conducted by experts, lead to the same conclusion: open economies grow faster. Thereby, the premises for reducing country risk are created as, in general, the increase in the globalization level has led to improved country rating. Of course, there are exceptions. For example, the comparison between the globalization ranking A.T. Kearney with the ratings given by one of the best known rating agencies, Standard & Poor’s has shown that countries with a high rank in the globalization index (Hungary, Portugal) were downgraded, while others, with lower index rank received the same rank. One explanation is represented by the "perverse" globalization effects, which means that not always the effects of globalization on economic and human progress are positive. Of course, it shouldn’t be neglected the fact that the opening led to increased interdependence and therefore of vulnerability. Country risk is not therefore an obstacle to globalization, however, it may be considered one of the factors which led to polarization, to marginalization of poor countries and hence, low listed in the risk rankings. In general however, development of the statistical data within the real economies states the mutual inter-relationship between the two concepts.

Suggested Citation

  • Elena-Mihaela ILIESCU & Marilena CIOBANASU, 2010. "Country Risk – Barrier or Key Factor of Globalization," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 3(3(11)), pages 175-182.
  • Handle: RePEc:wun:journl:tje:v03:y2010:i3(11):a07

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    References listed on IDEAS

    1. Lee, Ha Yan & Ricci, Luca Antonio & Rigobon, Roberto, 2004. "Once again, is openness good for growth?," Journal of Development Economics, Elsevier, vol. 75(2), pages 451-472, December.
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    Cited by:

    1. R?zvan C?t?lin DOBREA & Felicia Alina DINU, 2014. "A Build-Up Algorithm For Sustainable Discount Rates Projections," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 8(1), pages 1181-1191, November.

    More about this item


    country risk; index of globalization; cross-compliance; international economic flows; macroeconomic indicators;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies


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