THE COUNTRY RISK IN FOREIGN DIRECT INVESTMENT: CONCEPT AND CATEGORIES OF RISKS

The assessment of country risk in exports is based on the analysis of the capacity of payment and the eventual losses for the creditor. The country risk in foreign direct investment is, instead, related to the events that can produce losses as a consequence of breach of contracts, deprivation of property rights, damage to assets or cessation of activities. Considering that characteristics of exports and foreign direct investment are different, this paper presents an analysis of the concept and the scope of country risk in both operations in order to know which categories of risk are shared and which categories are specific.