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Foreign direct investment in high-risk environments: an historical perspective

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  • Mark Casson
  • Teresa da Silva Lopes

Abstract

Since the banking crisis of 2008 the global economy is perceived as riskier than before. Firms that cannot manage risks have withdrawn from countries in which they previously invested. These problems are not new. For centuries firms have invested in risky foreign environments, and many of them have succeeded. This paper reviews the risk management strategies of foreign investors. Using archival evidence and secondary sources it distinguishes the different types of risks that investors face and the different strategies by which risks can be managed. It investigates which strategies are used to manage which types of risk.

Suggested Citation

  • Mark Casson & Teresa da Silva Lopes, 2013. "Foreign direct investment in high-risk environments: an historical perspective," Business History, Taylor & Francis Journals, vol. 55(3), pages 375-404, April.
    • Handle: RePEc:taf:bushst:v:55:y:2013:i:3:p:375-404
    DOI: 10.1080/00076791.2013.771343
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    References listed on IDEAS

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    1. repec:ucp:bkecon:9789053561799 is not listed on IDEAS
    2. Bamberg,J. H., 1994. "The History of the British Petroleum Company," Cambridge Books, Cambridge University Press, number 9780521259507, January.
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    Cited by:

    1. Teresa da Silva Lopes & Mark Casson & Geoffrey Jones, 2019. "Organizational innovation in the multinational enterprise: Internalization theory and business history," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(8), pages 1338-1358, October.
    2. Christopher Kobrak & Michael-Jörg Oesterle & Björn Röber, 2018. "Escape FDI and the Varieties of Capitalism: Why History Matters in International Business," Management International Review, Springer, vol. 58(3), pages 449-464, June.
    3. Gölgeci, Ismail & Arslan, Ahmad & Khan, Zaheer & Kontkanen, Minnie, 2021. "Foreign firm operations and skills development of local employees in violence-hit countries," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    4. Alexis Catanzaro & Christine Teyssier, 2021. "Export promotion programs, export capabilities, and risk management practices of internationalized SMEs," Small Business Economics, Springer, vol. 57(3), pages 1479-1503, October.
    5. María Inés Barbero & Andrea Lluch & Marcelo Bucheli & Gonzalo Romero Sommer, 2014. "Multinational Corporations, Property Rights, and Legitimization Strategies: US Investors in the Argentine and Peruvian Oil Industries in the Twentieth Century," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 54(2), pages 145-163, July.
    6. Caterina Moschieri & Maria Fernandez-Moya, 2022. "A dynamic long-term approach to internationalization: Spanish publishing firms’ expansion and emigrants in Mexico (1939–1977)," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(5), pages 818-849, July.
    7. Noémie Dominguez, 2018. "Promotion agencies and SMEs’ internationalization process: A blessing or a curse? [Agences de promotion et processus internationalisation des PME: bénédiction ou malédiction?]," Journal of International Entrepreneurship, Springer, vol. 16(1), pages 58-81, March.
    8. Xia Han & Xiaohui Liu & Lan Gao & Pervez Ghauri, 2018. "Chinese Multinational Enterprises in Europe and Africa: How do They Perceive Political Risk?," Management International Review, Springer, vol. 58(1), pages 121-146, February.
    9. Bo-Rui Yan & Qian-Li Dong & Qian Li, 2019. "Research on Risk Measurement of Supply Chain Emergencies in International Capacity Cooperation," Sustainability, MDPI, vol. 11(19), pages 1-18, September.
    10. Han, Xia, 2021. "Risk management, legitimacy, and the overseas subsidiary performance of emerging market MNEs," International Business Review, Elsevier, vol. 30(4).
    11. Yao An & Ning Liu & Lin Zhang & Huanhuan Zheng, 2022. "Adapting to climate risks through cross-border investments: industrial vulnerability and smart city resilience," Climatic Change, Springer, vol. 174(1), pages 1-29, September.
    12. Josée St-Pierre & Annie Royer & Crispin Enagogo & Jean Pierre Dany Menguele, 2024. "Autonomie financière et activités d’exportation des PME du secteur bioalimentaire : Planifier adéquatement les dépenses à engager," CIRANO Project Reports 2024rp-16, CIRANO.
    13. Witte, Caroline T. & Burger, Martijn J. & Pennings, Enrico, 2020. "When political instability devaluates home-host ties," Journal of World Business, Elsevier, vol. 55(4).

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