ANALYZING THE RELATIONSHIP BETWEEN MONETARY RESERVES AND COUNTRY POLITICAL RISK: A MODEL FOR SMALL AND MEDIUM‐SIZED MNCs

Abstract

In this study a relationship between the fluctuation of a nation's monetary reserves and political risk is established. A least square regression model is used for the 1972–87 period and monetary reserves fluctuations of nineteen countries are analyzed. It is concluded that monetary reserves data can be used as a cost efficient proxy for political risk in moderate risk non‐oil exporting countries. Less politically risky countries also exhibit a positive relationship but the results are not statistically significant. This study has special implications for small and medium‐sized corporations. Further, the limitations of this study are discussed.

Citation

Anaam Hashmi, M. (1994), "ANALYZING THE RELATIONSHIP BETWEEN MONETARY RESERVES AND COUNTRY POLITICAL RISK: A MODEL FOR SMALL AND MEDIUM‐SIZED MNCs", International Journal of Commerce and Management, Vol. 4 No. 1/2, pp. 38-49. https://doi.org/10.1108/eb047286