Country Risk Research Articles

WASH Levels and Associated Human Health Risks in War-Prone West African Countries: A Global Indicators Study (2015 to 2021).

Water, Sanitation and Hygiene (WASH) levels have been shown to have impacts on health. However, the knowledge of WASH levels in war-prone West African countries is limited. The study extracted data (2015-2021) from the Joint Monitoring Programme (WHO/UNICEF), World Bank and Demographic and Health Surveys (DHS) to estimate WASH levels in the study countries. Pearson correlation analysis was used to establish the association among the WASH levels. Results showed that women had better access to safe water (56.39%), good sanitation (59.36%) and good hygiene (60.23%) compared to men. The urban population had better access to safe water (57.60%), good sanitation (61.23%), and good hygiene (65.65%) than the rural population. Among the countries under study, Nigeria had the highest access to safe water (36.10%) and good sanitation (24.41%), while Mali had the highest access to good hygiene (27.93%). Pearson correlation analysis showed a strong positive association between safe water and good hygiene (r = .998), safe water and sanitation (r = .996) and hygiene and sanitation (r = .998) at .00 significant levels. Based on the findings, it is recommended that integrated WASH programmes with combined infrastructure development, behaviour change campaigns and community engagement should be encouraged to ensure peaceful and sustainable access to WASH levels.

The relationship between financial risk, financial openness, trade openness, and financial development in Southern Mediterranean countries

The relationship between financial risk, financial openness, trade openness, and financial development in Southern Mediterranean countries

Unveiling the Nexus between Climate Change Performance, Default Risk, and Financial Stability in European Union Countries

Unveiling the Nexus between Climate Change Performance, Default Risk, and Financial Stability in European Union Countries

The quest for explosive bubbles in the Indonesian Rupiah/US exchange rate: Does the uncertainty trinity matter?

The Generalized Supremum Augmented Dickey-Fuller (GSADF) technique is performed to resolve whether the Indonesian Rupiah/US exchange rate has experienced multiple explosive bubbles. The GSADF uncovers that the Indonesian Rupiah/US exchange rate deviates from the fundamental values by six times from January 1985 to September 2023, periodically indicating the presence of numerous explosive behaviors. Once the full-sample period separates into the managed-floating regime and the free-floating regime, the GSADF still detects multiple bubbles. Of particular curiosity on uncertainty trinity, this study underlines that global geopolitical risk negatively drives explosive actions in the ratio of exchange rates for non-traded and traded goods. The global economic policy uncertainty negatively affects speculative bubbles in the exchange rate and the ratio of exchange rates for non-traded. The country's geopolitical risks negatively strike only speculative bubbles in the exchange rate. Further, we find heterogeneity in our results by examining different exchange rate systems. The robustness checks further firmly ascertain across baseline empirical findings.

Do governance settings moderate the effect of country risk on firms' cash holdings? Evidence from China

Do governance settings moderate the effect of country risk on firms' cash holdings? Evidence from China

Investigating the effects of crony capitalism on CO2 emissions

Reducing carbon emissions is crucial on both global and national scales due to their impact on the climate. However, concerns about rent-seeking behavior hindering emissions reduction policies have arisen, as such policies can be costly. The presence of crony capitalism in countries is a significant concern in this regard, which unfortunately has not been considered a research gap. To investigate the impact of crony capitalism on CO2 emissions in 73 countries between 2000 and 2021, this study employed the innovative Method of Moment Quantile Regression (MM-QR). Four proxies for crony capitalism were used, including economic freedom, the International Country Risk Guide (ICRG) indicators, worldwide governance indicators, and a combined proxy of the three proxies aimed at reducing crony capitalism. The results indicated that all four proxies for crony capitalism significantly reduced CO2 emissions at different quantiles. The composite proxy was the most effective, while the ICRG proxy was the least effective. Additionally, all proxies except for the ICRG proxy had a greater impact on reducing CO2 emissions at high quantiles. Therefore, crony capitalism leads to an increase in CO2 emissions. The study confirmed the Kuznets curve and found that energy consumption and industrialization increase CO2 emissions, while higher energy prices and population reduce CO2 emissions.

The JSE Size-Based Indices and Country Risk Components under Bullish and Bearish Market Conditions

The JSE Size-Based Indices and Country Risk Components under Bullish and Bearish Market Conditions

Do governance settings moderate the effect of country risk on firms' cash holdings Evidence from China

Do governance settings moderate the effect of country risk on firms' cash holdings Evidence from China

In the Shadow of Country Risk. Asset Pricing Model of Emerging Market Corporate Bonds

In the Shadow of Country Risk. Asset Pricing Model of Emerging Market Corporate Bonds

Analysis of determinants influencing the credit ratings of European Union countries

The process of evaluating a country's risk involves numerous intricate factors that must be examined and considered prior to determining the ultimate credit rating. This paper will examine the pertinent factors that are taken into account when assessing an EU member state's creditworthiness. Some of the most significant factors considered when generating a credit rating evaluation include GDP growth, GDP per capita, inflation, governmental debt, and past performance in paying financial obligations. Examining the role of credit rating agencies and their evaluations in the economy, with a particular emphasis on the EU market and regulatory structure as well as the financial crisis of 2007, is crucial for gaining a deeper comprehension of the research. The empirical part of the paper looks into the connection between factors within certain nations and the credit ratings they are given. The paper aims to ascertain the significance of these determinants in EU member states as well as any potential variations in the relative relevance of particular determinants. It will be investigated whether and to what degree determinants affect country credit ratings using the multiple regression analysis method. In the end, a determination on the significance and relationship of factors to the assignment of credit rating assessments will be made on the basis of the analysis performed. The analysis's anticipated outcomes ought to be significant from an economic standpoint. The coefficient of multiple determination will enable comparisons between each nation, enabling an evaluation of the results' representativeness.

Rice Production Risk in Main Producing Countries 1961-2021

Rice is an important food commodity to meet the high demand for food, especially in Asia. Most of the central producing countries of this commodity are located in Asia, and they play a significant role in supporting the availability of food for the people amidst the significant risks and uncertainties in carrying out rice farming, including the consequences of climate change and pests and diseases. This study aims to (1) find out the trend of rice production and production risks in the central producing countries over 61 years and (2) find out the risks of rice production in each of the central producing countries. This research was conducted using descriptive analysis using secondary data from 1961-2021, which was processed into tables and graphs. Meanwhile, the calculation of production risk is carried out using the coefficient of variation method. The results show that rice production in the central producing countries has a positive trend, where production increases from year to year. This is followed by a decrease in the risk of rice production every year. Vietnam is a country with the most significant rice production risk, while Cina and Brazil are countries with the lowest production risk. The application of programs proclaimed by the government, which are also adapted to the characteristics of farmers and actual conditions in the field, is expectee to minimize production risks so that optimal production can be achieved.

АКТУАЛЬНЫЕ ПРОБЛЕМЫ УПРАВЛЕНИЯ СРЕДСТВАМИ ПАЕВЫХ ИНВЕСТИЦИОННЫХ ФОНДОВ В НЕСТАБИЛЬНЫХ ЭКОНОМИЧЕСКИХ УСЛОВИЯХ НА ПРИМЕРЕ АО УК «ИНГОССТРАХ-ИНВЕСТИЦИИ»

One of the key trends in the financial market, which actively manifested itself during the pandemic and then under sanctions pressure, was the active development of collective investments. At the same time, the new operating conditions for management companies, associated with the blocking of foreign assets, provoked significant difficulties in providing financial services to clients. In the current conditions, there is an increasing need to assess the practice of functioning of mutual investment funds and create mechanisms to reduce the negative consequences of the sanctions burden for individual financial market entities. Based on an analysis of the operating conditions of the management company and an assessment of the efficiency of managing the funds of mutual investment funds, it was determined that the key problems in the activities of the management company are the lack of significant financial results in the management of mutual funds, as well as the suspension of the work of five funds, which resulted in a deterioration in the financial performance of the company. In particular, there was a reduction in the company's assets by a third, an increase in country and currency risks, as well as a significant increase (by 350%) in labor costs. Based on the results of the analysis, the authors formulated measures to improve the efficiency of the company, including the creation of a personnel policy management system to improve the efficiency of the fund, the implementation of a scheme for the settlement of frozen assets by transferring funds from frozen mutual funds to a closed fund, as well as the transition to passive strategies for managing mutual funds. A project for a fund focused on Islamic investments has been developed, the portfolio of which includes shares of companies included in the Moscow Exchange Islamic Investment Index. An assessment of the fund’s potential showed prospects for forming the value of the fund's net assets in the amount of 990 million rubles.

АКТУАЛЬНЫЕ ПРОБЛЕМЫ УПРАВЛЕНИЯ СРЕДСТВАМИ ПАЕВЫХ ИНВЕСТИЦИОННЫХ ФОНДОВ В НЕСТАБИЛЬНЫХ ЭКОНОМИЧЕСКИХ УСЛОВИЯХ НА ПРИМЕРЕ АО УК «ИНГОССТРАХ-ИНВЕСТИЦИИ»

One of the key trends in the financial market, which actively manifested itself during the pandemic and then under sanctions pressure, was the active development of collective investments. At the same time, the new operating conditions for management companies, associated with the blocking of foreign assets, provoked significant difficulties in providing financial services to clients. In the current conditions, there is an increasing need to assess the practice of functioning of mutual investment funds and create mechanisms to reduce the negative consequences of the sanctions burden for individual financial market entities. Based on an analysis of the operating conditions of the management company and an assessment of the efficiency of managing the funds of mutual investment funds, it was determined that the key problems in the activities of the management company are the lack of significant financial results in the management of mutual funds, as well as the suspension of the work of five funds, which resulted in a deterioration in the financial performance of the company. In particular, there was a reduction in the company's assets by a third, an increase in country and currency risks, as well as a significant increase (by 350%) in labor costs. Based on the results of the analysis, the authors formulated measures to improve the efficiency of the company, including the creation of a personnel policy management system to improve the efficiency of the fund, the implementation of a scheme for the settlement of frozen assets by transferring funds from frozen mutual funds to a closed fund, as well as the transition to passive strategies for managing mutual funds. A project for a fund focused on Islamic investments has been developed, the portfolio of which includes shares of companies included in the Moscow Exchange Islamic Investment Index. An assessment of the fund’s potential showed prospects for forming the value of the fund's net assets in the amount of 990 million rubles.

Модель бізнесу ощадних банків Скандинавії

The segment of savings banks occupies a prominent place in the banking systems of European countries. Savings banks have survived systemic crises, institutional transformations, and consolidation, maintaining high depositor confidence thanks to a restrained appetite for risks. The relevance of researching the experience of savings banks in Scandinavia is due to a long history, a special type of corporate structure and business model in attracting and deploying resources. Although the activity of foreign savings banks in the modern market environment remains outside the attention of domestic researchers, in Ukraine household savings form the basis of the resource base of many banks, which requires a special approach of the regulator. According to the results of the study, it was found that savings banks achieve the effect of economies of scale due to the centralization of certain functions. At the same time, they are moving away from the historical business model, which is embodied in a change in legal status, an increasing focus on profit, the development of the corporate segment, digitization of operations, access to other local markets, conducting international operations, participation in the capital of foreign financial institutions, mergers and acquisitions, which lead to an increase in the scale of business. The emergence and development of savings banks in Scandinavia is a reaction to the growth of citizens\\\\\\\' well-being (as an offer of savings) and at the same time - a desire to improve it. The security of the banks\\\\\\\' business was certainly helped by a conservative attitude towards accepting credit risk. An important factor of trust in banks was and remains a low corruption risk in the Scandinavian countries. It was concluded that the creation of associations of savings banks and joint platforms deserves attention for use in Ukraine, as it ensures business efficiency even for small institutions.

Bilateral investment treaties and portfolio investment

We analyze the effect of bilateral investment treaties (BITs) on bilateral foreign portfolio investment in equity and debt securities. We find that expropriation risk and the level of a BIT’s investor protection are complementary. Applying a Poisson Pseudo-Maximum-Likelihood model to a panel of 60 home and 39 host countries from 2002 to 2017, we find that host countries receive 40% more bilateral equity investment when they protect foreign investors with a BIT. This effect almost doubles when investment protection of BITs is strong, and the political risk of the host country is high.

Estimation of building project completion duration using a natural gradient boosting ensemble model and legal and institutional variables

Estimation of building project completion duration using a natural gradient boosting ensemble model and legal and institutional variables

СОВОКУПНЫЙ РИСК ПРИ РЕАЛИЗАЦИИ КРУПНОГО КОМПЛЕКСНОГО ПРОЕКТА СТРОИТЕЛЬСТВА АТОМНОЙ ЭЛЕКТРОСТАНЦИИ

The article identifies the problems of the modern international nuclear energy market, analyzes domestic and foreign experience in the construction of technically complex megaprojects, studies and systematizes organizational and technical aspects of the concept of reliability and risks of technically complex industrial facilities on the example of an international project for the construction of a nuclear power plant. The purpose of the research article is to solve one of the most important tasks – to determine the total investment risk and its assessment in an inextricable relationship with the stages of the project life cycle. The article systematizes both the principles of assessing the organizational and technical reliability of the system under study, as well as the methods of types of aggregate investment risk. A proprietary multi-criteria approach to the concept of reliability is being developed using modern theoretical methods in the context of the development of nuclear power plant construction projects abroad, respectively, taking into account country and industry risks.

Monetary policy in practice: do central banks respond to movements in exchange rate and credit growth?

PurposeThis study examines the importance of exchange rate and credit growth fluctuations when designing monetary policy in Thailand. To this end, the authors construct a small open economy New Keynesian dynamic stochastic general equilibrium (DSGE) model. The model encompasses several essential characteristics, including incomplete financial markets, incomplete exchange rate pass-through, deviations from the law of one price and a banking sector. The authors consider generalized Taylor rules, in which policymakers adjust policy rates in response to output, inflation, credit growth and exchange rate fluctuations. The marginal likelihoods are then employed to investigate whether the central bank responds to fluctuations in the exchange rate and credit growth.Design/methodology/approach This study constructs a small open economy DSGE model and then estimates the model using Bayesian methods.Findings The authors demonstrate that the monetary authority does target exchange rates, whereas there is no evidence in favor of incorporating credit growth into the policy rules. These findings survive various robustness checks. Furthermore, the authors demonstrate that domestic shocks contribute significantly to domestic business cycles. Although the terms of trade shock plays a minor role in business cycles, it explains the most significant proportion of exchange rate fluctuations, followed by the country risk premium shock.Originality/value This study is the first attempt at exploring the relevance of exchange rate and credit growth fluctuations when designing monetary policy in Thailand.

Geopolitical Risk & Indonesian Stock Market Response

Objective: The aim of this research is to determine empirically the impact of geopolitical risk originating from countries with high geopolitical risk and domestic ones on the Composite Stock Price Index in Indonesia. In addition, this research aims to determine the role of geopolitical actions in strengthening or weakening the relationship between geopolitical risk and the Composite Stock Price Index in Indonesia. Design/Methods/Approach: This research uses geopolitical risk index (GPRH) data from countries with the highest geopolitical risk index in the last 3 years and domestic ones consisting of Ukraine, Russia, America, China and Indonesia. Meanwhile, geopolitical action risk (GPRA) is a risk index measured in aggregate from January 2004-October 2023, so the number of observations in this study reached 238. Findings: The findings in the research show that Ukraine and America have a negative and significant influence, while China and Russia have a positive and significant impact on the composite stock price index in Indonesia. Apart from that, this research also found that the influence of geopolitical risk on the composite stock price index in Indonesia is greater when geopolitical actions such as escalation of war and acts of terror occur. Originality/Value: This research complements several previous studies regarding the impact of geopolitical risk on the Indonesian composite stock price index. Several previous studies have not examined the impact of each country's geopolitical risk on the composite stock price index and how it is moderated by geopolitical action. Practical/Policy implication: The findings in this research prove that countries that have high geopolitical risk have a significant influence on the Composite Stock Price Index in Indonesia. So that investors can use this research as a consideration when investing in the capital market by considering geopolitical risks originating from abroad and domestically.

Assessing financial risks of foreign agricultural investment in belt and road countries: A risk index approach and VHSD-EM model analysis.

This study establishes a risk index system to evaluate the financial risks of foreign agricultural investment in Belt and Road countries. Agricultural foreign investment risk prevention has emerged as a crucial concern across various sectors globally. We assess the four key dimensions such as political and military risk, economic market risk, social and cultural risk, and resource and environmental risk. We employ the Vertical and Horizontal Leveling Method and Entropy Weighting Method (VHSD-EM) for measuring and analyzing foreign agricultural investment risk levels in Belt and Road countries from 2014 to 2021. Moreover, we used spatial correlation analysis, the Getis-Ord Gi* statistic, to identify hot and cold spots of agricultural foreign investment risks. First political & military, and environmental risks are the main influencing factors of agricultural foreign investment risk. The average AFDI level exceeded in Southeast and South Asia, and certain spillover effects were found in Southeast Asia. Second, the Belt and Road" initiative effectively reduces the risk of AFDI and helps to weaken the spillover effect among fellow countries. A significant spillover effect in AFDI from neighboring countries can lead to high-risk areas for sustained AFDI formation. Third to address such challenges, the Chinese government has prerequisites to enhance foreign agricultural investments in Belt and Road countries and establish a measurement index for agricultural investment risks. Government needs to establish a public service system to enhance the development of large-scale multinational agricultural enterprises. Foreign cooperation is essential for multi and bilateral investment negotiation and optimizing the financial tools to mitigate agricultural foreign direct investment risk in Belt and Road countries.