Political risk: Interpreting the International context

Abstract

Introduction— Since the beginning of the economic opening processes in the 1990s, Investments Have Increased (FDI) worldwide. However, not all countries are proposed as ideal destinations for recipients of FDI, they must have an attractive economic, political, and social landscape, which is studied in this work.

Objective— This research has the objective of studying the influence that political risk may have on the decision-making on the subject of FDI by entrepreneurs, in particular, Colombians

Methodology— A series of decision criteria is proposed from conceptual areas where the inversion problem has been analyzed. A scale of value has been generated for each criterion, which can be studied as means of stochastic multicriteria acceptability analysis.

Results— The analysis results point to the United States as the best destination for Colombian investment, followed by Brazil, the United Kingdom, and Chile, while Panama, Spain, and Mexico are not favored by any weighting.

Conclusions— This work might be helpful in decision-making processes intended to reduce the uncertainty that is proper of the foreign investment environment.