Corporate Strategy and Valuation
Political risk refers to the potential for losses or adverse effects on business operations and investments due to political changes or instability in a country. This can include changes in government policies, regulatory environments, social unrest, and geopolitical tensions that may impact a company's ability to operate effectively and profitably. Understanding political risk is crucial for businesses when choosing their market entry modes and strategies, as it directly influences decisions regarding investment and operational approaches in foreign markets.
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