Factors analysis of domestic risk characteristics for MNCs

Author

Ho, Catherine S F ; Rashid, Ahmad Husni Mohd ; Teoh, Boon Chui

Author_Institution

Inst. of Bus. Excellence, Univ. Technol. MARA, Shah Alam, Malaysia

fYear

2011

fDate

5-6 Dec. 2011

Firstpage

632

Lastpage

637

Abstract

This research investigates the significant domestic risks characteristics taken into consideration by multinational corporations (MNCs) when making investment decisions across countries. These risk characteristics are factor analyzed to reveal their importance in the decision making process of foreign expansion and investment. A set of methodologies were applied with reliability and validity tests, as well as factor analysis in analyzing the results. Novel data from MNCs assent that key risk characteristics vital to foreign direct investment (FDI) decisions can be factored into eight risk groups namely: facilities and location, market, political, technical, legal, financial, human resource and cultural risks. Results provided important information in attracting value-added investments for emerging countries.

Keywords

cultural aspects; decision making; industrial economics; investment; labour resources; law; politics; risk analysis; statistical analysis; MNC; cultural risk; decision making process; domestic risk characteristics; facilities and location risk; factor analysis; financial risk; foreign direct investment; foreign expansion; human resource risk; investment decision; legal risk; market risk; multinational corporations; political risk; reliability test; technical risk; validity test; value-added investment; Cultural differences; Exchange rates; Investments; Law; Foreign investment; domestic risks; multinational corporations;

fLanguage

English

Publisher

ieee

Conference_Titel

Humanities, Science and Engineering (CHUSER), 2011 IEEE Colloquium on

Conference_Location

Penang

Print_ISBN

978-1-4673-0021-6

Type

conf

DOI

10.1109/CHUSER.2011.6163809

Filename

6163809