Component of Cross-Border Effects Analysis. Political Risk considers the probability a government will intervene to the detriment of the corporation by way of regulation, punitive tax policies, restriction on cash policies, expropriation of assets, etc. Many use the Sovereign Debt Credit Rating as a proxy for political risk.
Will Dearman is the Editor of TheStrategyBlog. His professional experience includes acquiring and later selling a portfolio of Internet-based companies as well as working as a credit underwriter in Bank of America's commercial middle market bank. His interests include finance, innovation, strategy and social technology. Find him on Twitter!