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Political Risk Factors

Political Risk Factors

Here’s the scenario.  Your firm has the opportunity to purchase a private firm (Zappo) making a complementary product.  Zappo is located in Colombia.

There are a number of sources for country-specific data listed on the Learning Activities page and here is one very specific source: Colombia: Risk Assessment, from Michigan State University’s GlobalEdge database.

Review the political risk factors and identify those that could affect your business, summarize and describe these in your initial post, explaining how your cash flows could be affected.

In addition, explain why threats of terrorism due to friction between two countries (the U.S. and Colombia) could possible affect your business, even though the terrorism has no effect on the relations between the U.S. and Colombia.

Finally, assume that an upcoming election in Colombia may result in a complete changes in government.

Explain why the election could have significant effects on your cash flows.