19Country Risk Analysis
Short Description
Country risk assessment (CRA) deals with how a firm addresses the risks involved in making investments in a foreign country. Country risk is the risk that economic, political, or social conditions and events in a foreign country will adversely affect a firm's financial and strategic interests. Decision makers need to weigh any potential loss of invested capital that could result from troublesome circumstances in a foreign country. CRA as a discipline seeks to identify these risks and determine the degree to which they will negatively impact their return on investment (ROI). Country risk can be segmented into the following six distinct, yet interrelated, categories:
- Economic risk
- Transfer risk
- Exchange ...
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