Shock Waves of Political Risk on the Stock Market: The Case of Korean Companies in the U.S.

Pak, Yunjung; Kim, Young Jin; Song, Min; Kim, Yong‐Hak

doi:10.21588/dns.2015.44.1.006

Cited by 6 publications

(2 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The management, strategy, and international business literature has been overwhelmed of late with papers asserting the return of political risk and reflecting on the impact of geopolitics in a de-globalizing, conflict-ridden world (see, inter alia, De Villa, 2023;Luo and Van Assche, 2023;Meyer et al, 2023;Ratten, 2023;or Sheth and Uslay, 2023). Of course, in reality, political risk never went away (Hartwell and Devinney, 2021), even in the heady days of the globalization of the 1990s (Henisz et al, 2010), as global integration brought its own risks, including JEL classification -F1, F3, N4 synchronization of monetary policies across developed economies (Chatterjee, 2016) and the easier transmission of political shocks across countries (Pak et al, 2015). Despite these new risks, the tighter integration of economies during this period also allowed for greater risksharing measures to lessen overall political risk for companies (Lee et al, 2023), while familiar forms of political risk (mainly the threat of expropriation) from the Cold War (Kobrin, 1979;Simon, 1984) lessened substantially.…”

Section: Introductionmentioning

confidence: 99%

“…Of course, in reality, political risk never went away (Hartwell and Devinney, 2021), even in the heady days of the globalization of the 1990s (Henisz et al. , 2010), as global integration brought its own risks, including synchronization of monetary policies across developed economies (Chatterjee, 2016) and the easier transmission of political shocks across countries (Pak et al. , 2015).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Diplomacy and MNE strategy: how international relations can influence international business

Hartwell,

Ursprung

2024

MBR

View full text Add to dashboard Cite

Purpose This study, a perspective piece, aims to argue that one particular slice of political institutional operations – the conduct of international relations – offers a clue to the possible risks that businesses face from geopolitics. Design/methodology/approach The authors examine the various facets of international relations and diplomacy, including the processes and arenas, to show the relevance of statecraft for firms looking to minimize political risk. Findings By understanding the role of diplomacy and statecraft as a process, firms can better prepare themselves for events that have far-reaching ramifications. This is very different than minimizing risk from inherent geopolitical tensions and allows for a more flexible approach to understanding risk levels in the global arena. Originality/value International business scholarship has focused on institutions and their effects on firms and has recently begun to re-examine the role of geopolitics and political risk on firm performance and decisions. However, the current literature continues to have a superficial understanding of institutional processes and their impact on business, especially when it comes to the daily workings of political institutions.

show abstract

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Diplomacy and MNE strategy: how international relations can influence international business

Hartwell,

Ursprung

2024

MBR

View full text Add to dashboard Cite

show abstract

Political conflict and foreign portfolio investment: Evidence from North Korean attacks

Gerlach

Yook

2016

Pacific-Basin Finance Journal

View full text Add to dashboard Cite

We examine the response of foreign investors to escalating political conflict and its impact on the South Korean stock market surrounding 13 North Korean military attacks between 1999 and 2010. Using domestic institutions and domestic individuals as benchmarks, we evaluate the trading behavior and performance of foreign investors. Following attacks, foreigners increase their holdings of Korean stocks and buy more shares of risky stocks. Performance results show foreigners maintain their pre-attack level of performance while domestic individuals, who make the overwhelming majority of domestic trades, perform worse. In addition, domestic institutions improve their performance. Overall, the results are consistent with the predictions based on the benefits of international diversification. Unlike domestic individuals, foreigners trade more shares than usual and deviate from their general strategy of positive feedback trading.

show abstract

Does geopolitical risk affect bilateral trade? Evidence from South Korea

Kim

Jin

2023

Journal of the Asia Pacific Economy

View full text Add to dashboard Cite

Shock Waves of Political Risk on the Stock Market: The Case of Korean Companies in the U.S.

Cited by 6 publications

References 0 publications

Diplomacy and MNE strategy: how international relations can influence international business

Diplomacy and MNE strategy: how international relations can influence international business

Political conflict and foreign portfolio investment: Evidence from North Korean attacks

Does geopolitical risk affect bilateral trade? Evidence from South Korea

Contact Info

Product

Resources

About