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An Exploration Of: How Political Risk Components Affect The Stock Return And Volatility Considering Different Countries Of Varying Economic Development.

Fitzsimons, Emma LU and Sun, Minghong LU (2012) NEKN02 20121
Department of Economics
Abstract
Five main components of political risk were extracted from the International Country Risk Guide (ICRG) Rating model, this paper researches the elements: Government Stability, Socioeconomic Conditions, Investment Profile, Internal Conflict and External Conflict. We have chosen four countries to examine: the United Kingdom, Mexico, China and Iran from different economic worlds. We would like to investigate the relative importance of political risk factors on volatility and stock market returns. In addition we aim to explore the influence of each factor on stock market returns and volatility, in order to highlight the areas of importance for investors when making investment decisions and the government when making political decisions.... (More)
Five main components of political risk were extracted from the International Country Risk Guide (ICRG) Rating model, this paper researches the elements: Government Stability, Socioeconomic Conditions, Investment Profile, Internal Conflict and External Conflict. We have chosen four countries to examine: the United Kingdom, Mexico, China and Iran from different economic worlds. We would like to investigate the relative importance of political risk factors on volatility and stock market returns. In addition we aim to explore the influence of each factor on stock market returns and volatility, in order to highlight the areas of importance for investors when making investment decisions and the government when making political decisions. Considering both qualitative and quantitative issues within the investigation, it is found that less economically developed countries are likely to be more exposed to political risks than its developed counterpart and individual countries have different influential factors from political risk. Moreover each stock market is influenced by a unique series of political factors, with very little overlap between each market in terms of relevant variables. (Less)
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author
Fitzsimons, Emma LU and Sun, Minghong LU
supervisor
organization
course
NEKN02 20121
year
type
H1 - Master's Degree (One Year)
subject
keywords
Political risk, Government Stability, Socioeconomic Condition, Investment Profile, Internal Conflict, External Conflict, Stock Return
language
English
id
2628691
date added to LUP
2012-06-08 14:25:27
date last changed
2012-06-08 14:25:27
@misc{2628691,
  abstract     = {Five main components of political risk were extracted from the International Country Risk Guide (ICRG) Rating model, this paper researches the elements: Government Stability, Socioeconomic Conditions, Investment Profile, Internal Conflict and External Conflict. We have chosen four countries to examine: the United Kingdom, Mexico, China and Iran from different economic worlds. We would like to investigate the relative importance of political risk factors on volatility and stock market returns. In addition we aim to explore the influence of each factor on stock market returns and volatility, in order to highlight the areas of importance for investors when making investment decisions and the government when making political decisions. Considering both qualitative and quantitative issues within the investigation, it is found that less economically developed countries are likely to be more exposed to political risks than its developed counterpart and individual countries have different influential factors from political risk. Moreover each stock market is influenced by a unique series of political factors, with very little overlap between each market in terms of relevant variables.},
  author       = {Fitzsimons, Emma and Sun, Minghong},
  keyword      = {Political risk,Government Stability,Socioeconomic Condition,Investment Profile,Internal Conflict,External Conflict,Stock Return},
  language     = {eng},
  note         = {Student Paper},
  title        = {An Exploration Of: How Political Risk Components Affect The Stock Return And Volatility Considering Different Countries Of Varying Economic Development.},
  year         = {2012},
}