All Academic, Inc. Research Logo

Info/CitationFAQResearchAll Academic Inc.
Document

Gambling on Conflict: Profiling Investments in Conflict Countries
Unformatted Document Text:  Andreea Mihalache Updated: March 20, 2008 industries are vital to the host country, so these firms may be receiving more protection and reassurance from the host government than firms in other industries. Tables 6 and 7 include models similar to those in table 4, but with different operationalizations of the dependent variable. Table 6 shows results from ordered probit estimations, with PVthreat2 (3 answer categories) as the dependent variable. Table 7 contains the results from probit models, with PVthreat3 as the dependent variable. These models lend further support to my contentions. Firms with primary sector investments are more likely to perceive high threats from political violence and less likely to perceive low threats from political violence than investors in PCT and KCT industries. Furthermore, the effects of PCT and KCT investments on the dependent variable, while individually significant in the models, are not statistically different from each other. Tables 6 and 7 here 8. Conclusion Global investment patterns pose an interesting puzzle: why do some firms avoid conflict countries while others continue to invest there? These patterns contradict the conventional wisdom that the high risks associated with political violence act as a blanket deterrent for all foreign investors. Furthermore, previous research on the relationship between political violence and foreign investment does not shed much light on this question because it assumes homogeneity in investors’ reactions to political violence risk. I recognize that firms are heterogeneous and identify the investment attributes that increase firms’ sensitivity to political violence. Firms with investments that rely preponderantly on physical assets, have higher costs for exit, and serve non-host markets perceive higher threats from political violence. Data from a 2006 survey of foreign 39

Authors: Mihalache, Andreea.
first   previous   Page 39 of 62   next   last



background image
Andreea Mihalache
Updated: March 20, 2008
industries are vital to the host country, so these firms may be receiving more protection
and reassurance from the host government than firms in other industries.
Tables 6 and 7 include models similar to those in table 4, but with different
operationalizations of the dependent variable. Table 6 shows results from ordered probit
estimations, with PVthreat2 (3 answer categories) as the dependent variable. Table 7
contains the results from probit models, with PVthreat3 as the dependent variable. These
models lend further support to my contentions. Firms with primary sector investments
are more likely to perceive high threats from political violence and less likely to perceive
low threats from political violence than investors in PCT and KCT industries.
Furthermore, the effects of PCT and KCT investments on the dependent variable, while
individually significant in the models, are not statistically different from each other.
Tables 6 and 7 here
8. Conclusion
Global investment patterns pose an interesting puzzle: why do some firms avoid
conflict countries while others continue to invest there? These patterns contradict the
conventional wisdom that the high risks associated with political violence act as a blanket
deterrent for all foreign investors. Furthermore, previous research on the relationship
between political violence and foreign investment does not shed much light on this
question because it assumes homogeneity in investors’ reactions to political violence risk.
I recognize that firms are heterogeneous and identify the investment attributes that
increase firms’ sensitivity to political violence. Firms with investments that rely
preponderantly on physical assets, have higher costs for exit, and serve non-host markets
perceive higher threats from political violence. Data from a 2006 survey of foreign
39


Convention
Submission, Review, and Scheduling! All Academic Convention can help with all of your abstract management needs and many more. Contact us today for a quote!
Submission - Custom fields, multiple submission types, tracks, audio visual, multiple upload formats, automatic conversion to pdf.
Review - Peer Review, Bulk reviewer assignment, bulk emails, ranking, z-score statistics, and multiple worksheets!
Reports - Many standard and custom reports generated while you wait. Print programs with participant indexes, event grids, and more!
Scheduling - Flexible and convenient grid scheduling within rooms and buildings. Conflict checking and advanced filtering.
Communication - Bulk email tools to help your administrators send reminders and responses. Use form letters, a message center, and much more!
Management - Search tools, duplicate people management, editing tools, submission transfers, many tools to manage a variety of conference management headaches!
Click here for more information.

first   previous   Page 39 of 62   next   last

©2012 All Academic, Inc.