Political risk involves the uncertainty that investors have about changes in laws and regulations that national authorities apply to the transfer of funds across national borders and the ownership of assets within their jurisdictions by foreign firms and residents. Each national government can control the movement of securities across national borders, thus hindering foreign loans and investments, and the repatriation of profits, dividends and capital. Each government can use its legal powers to acquire the property of private parties — of foreign residents as well as of domestic residents — located within its jurisdiction. And each also can refuse to pay its debts to foreigners with minimal fear of being sued.
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- Political Risk and International Investment
Robert Z. Aliber
- Palgrave Macmillan UK
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