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Many U.S. companies fear investing in Third World countries because of the political risk associated with such ventures. Recent events in Iran, Nicaragua, El Salvador, the Philippines and others have under scored such concerns, making U.S. businesses reluctant to participate in some of the fastest growing markets in the Third World. Such political risks need not be so worrisome ‐ many U.S. business people remain unaware of how the Overseas Private Investment Corporation can substantially reduce risks by insuring companies against such uncertainties. This paper discusses the ways through which OPIC can alleviate political risk and compares OPIC’s insurance with the programs of private political risk insurers.

The World Bank established the Multilateral Investment Guarantee Agency (MIGA) in 1985 as the first truly global agency which insures foreign investments against political risks. MIGA is now in its fifth full year of operations and has been more successful than originally forecast. This paper will discuss the formation of MIGA and includes an analysis of its operations to date. When appropriate, comparisons will be made between MIGA operations and those of the U.S. investment insurance agency, OPIC, the Overseas Private Investment Company, as well as private market insurers. Selected cases of MIGA guarantees are discussed in the paper.

A widely used strategy to cope with the dangers of foreign investment by hedging against potential losses is political risk insurance. All multinational corporations are subject to political risk perils. Political risk is defined as the adverse effect on the value of a business arising out of direct or indirect actions by a foreign government. Broadly speaking, there are six different types of political risk: confiscation, expropriation and nationalization; contract repudiation and frustration; unfair regulatory environment; currency inconvertibility; contingency; and war risk. Similarly, policies available can be defined according to these six categories. In summary, political risk insurance addresses losses which occur because of politically motivated decisions.

The aims of this paper are: to explore the nature of political risk insurance (PRI) contracts as a form of regulation in the context of mining projects in developing countries; to examine how PRI providers factor corporate social responsibility (CSR) policies and practices of applicants in their initial decisions to provide PRI; to examine how CSR criteria are reflected in the terms of PRI contracts; to understand how failure to exercise good CSR practices by recipients of PRI affects insurance coverage; to shed light on how good CSR practices which minimize risk to companies and communities can be or are rewarded through PRI contracts; to identify opportunities for reform.

This article adopts a conceptual approach through analysis of the practical effects and public policy implications associated with use of PRI contracts as a regulatory mechanism to promote good CSR practices.

PRI contracts represent a form of proactive risk management used by investors. Because of the significant regulatory effect of the CSR provisions of PRI contracts provided by state‐based agencies, there is considerable potential for and value associated with greater transparency in the implementation of such contracts.

This article sheds light on the regulatory dimensions associated with the CSR provisions of PRI contracts. This represents a new contribution to the literature on CSR contracts, which until this point has focused largely on the CSR aspects of supply chain contracts.

Conventional wisdom suggests that war in the host country makes it unattractive for foreign firms to invest. To see if this is true for US firms on the aggregate, this paper aims to examine the veracity of a “permanent war economy” hypothesis, that foreign direct investment (FDI) may, in fact, increase in the host country not despite, but because of, war, i.e. one that lends credence to the idea that, in the USA, “defense [has] become one of constant preparation for future wars and foreign interventions rather than an exercise in response to one-off threats.”

The authors test the hypotheses using Generalized Method of Moments estimation, with Heckman Selection, on US FDI data from the Bureau of Economic Analysis and war data from the Correlates of War2 Project, the Uppsala Conflict Data Program/International Peace Research Institute data set, the International Crisis Behavior Project and the Center for Systemic Peace Major Episodes of Political Violence data set. The final sample consists of 351 country-year observations in 55 host countries from 1982 to 2006.

The findings indicate that overall US FDI in a host country in a given year decreases if the host country is engaged in wars with multiple countries and if the US Government is involved in the war. Most notably, the results show that US involvement in multiple host country wars is actually correlated with increased US FDI into the host country, providing empirical support for the “permanent war economy” hypothesis.

While other studies have focused on war and FDI, the authors have sought to show the impact of the involvement of arguably the most influential country, i.e. the USA, in the sovereign matters of a focal host country. By studying FDI from the USA as a function of US involvement in wars overseas, over the years with the greatest use of private military companies by the USA and the largest portion of global FDI accounted for by the USA, this work motivates a research agenda on home-host-"other” relations in the context of war and FDI, with the “other” being the supranational “elephant in the room.”

United States history is steeped in trade and trade debate, from the pivotal role of the Boston Tea Party in shaping the United States as a nation to the recent debate over the merits of U.S. ratification of the present version of the General Agreement on Tariffs and Trade (GATT) negotiations. It is no surprise, then, that the U.S. Department of Commerce is actively involved in promoting exports. In 1993, President Clinton announced a national export strategy for the United States, described as “a comprehensive plan [that] upgrades and coordinates the government's export promotion and export finance programs to help American firms compete in the global marketplace” (U.S. Department of Commerce, 1994). In particular, the strategy identifies past problems with U.S. trade promotion efforts and recommends improvements upon current ones. This includes enhancing existing trade finance programs such as the Exim Bank and the Overseas Private Investment Corporation, and creating the Tied Aid Fund to help U.S. firms compete on a level playing field. As an outcrop of this initiative, the Commerce Department identified 10 foreign nations as the big emerging markets (BEMs) of the upcoming century, markets where the potential for trade growth is the greatest.

Japanese General Trading Companies or sogo shoshas have been instrumental in the phenomenal Japanese economic miracle of the last 40 years. In 1982, the USA passed the Export Trading Company Act to home grow its own sogo shoshas; to date the Act has been ineffective ‐ yet the need remains. Examines what trading companies are and what functions they perform. Observes the steps that need to be taken to make them profitable and successful. Postulates that trading companies are an integral part of this country’s future.

Corporate investment in less developed countries can be a lucrative source of resources and earnings. But how does one minimize the risks—particularly the political risks? The current trend in risk‐assessment methodology is to use “hard data” rather than subjective analysis. But this can be a drawback because the quantitative methodologies used are often determined by the data available. Presented here is a framework for political risk assessment that does more than simply look at the numbers.

This study aims to identify project funding shortcomings in the existing literature and evaluate the financing channels accordingly.

This paper uses a structured literature review – a content analysis method. Then, the comparative analysis applied to data gathered from the content analysis.

To define the main research topics and establish a focus on hydroelectric power plant (HEPP) financing, a comprehensive structured literature review was conducted. According to the results of this study, there are three main categories of HEPP financing studies in the literature, namely, financing channels and products, factors that complicate financing and financing- risk relationship of HEPP projects. According to these findings, which criteria most affecting HEPP financing and which financing channel is the most suitable are determined.

Among all financing channels, only direct debt sources are selected.

This study is structured as a simple lender selection guide for HEPP investments. Selection criteria are applicable for both lenders and investors. For lenders, those criteria are expected to improve loan performance and optimize financial product selection. For investors, those criteria are expected to help choosing suitable products and improve revenues.

This study will contribute the researchers those intended to work on the topic.

This study will contribute to limited literature on HEPP financing. Project finance literature is limited and narrow even there is no study that investigates hydropower project finance sourcing. In this manner, this study can be considered as a pioneer.

The purpose of this paper is to investigate interstate warfare and its association with foreign direct investment (FDI) and multinational enterprise (MNE) strategy by integrating insights from international business (IB) and international political economy (IPE) literature.

This paper identifies economic and regulatory mediators for the relationship between war and FDI, laying the groundwork to evaluate strategies the MNE would undertake in the event of war in the host country.

The effects of war on MNE strategy can be separated into short‐term and long‐term effects. Specifically, the MNE may be influenced by war in its: initial investment decision; factors of significant importance for running the company's local operations; and critical factors for future foreign investments.

Studies using actual firm‐level data can look at whether MNEs from non‐warring states conduct business as usual elsewhere or leverage war in the host country to their advantage. Further investigation is also needed to determine the power that MNEs in the home country have over foreign policy to assert their own strategies in a particular host market.

This paper has implications for managers of MNEs in warring host countries or contemplating the expansion of their operations overseas to a war zone with regard to the likely impact of war on firm operations.

Current paradigms of IB, in failing to account for the macro‐level and contingent nature of warfare, leave a gap in the business literature: specifically, how the international political context affects firms' activities, strategies, and decision‐making processes. This paper attempts to incorporate warfare, together with firm‐specific, industry‐specific, and other country‐specific determinants to inform the question: what determines the international success or failure, and in turn the long‐run competitiveness, of firms in turbulent times?