Abstract

http://ssrn.com/abstract=555401
 
 

Footnotes (93)



 


 



Multinational Energy Firms in the Caspian Basin: A Bayesian Approach to Incorporate Political Risk in Corporate Strategy


Dennis Wright Michaud


Providence Consulting Group, LLC

February 1, 2005


Abstract:     
Multinational Firms that undertake project finance ventures in developing states are faced with a myriad of problems particularly: undeveloped state institutions; low levels of transparency in national policy formation; uncertain national preferences. The author outlines a strategy that multinational firms should utilize to ascertain more accurately initial counterpart (state) preferences. Moreover, this strategy should facilitate the refinement of the firm's perceptions of host state preferences that may be utilized to enhance corporate strategy.

In this paper the nexus between political risk and a multinational firm's cost of capital is illuminated. I illustrate how the use of Bayesian learning by firms in their interaction with states will lead to a better risk management strategy, a reduction in cost of capital for firms and an increase in the number of projects that firms will undertake in developing nations states.

Number of Pages in PDF File: 69

Keywords: Strategy, Multinational, Political Risk

JEL Classification: G31, P16, M20

working papers series


Download This Paper

Date posted: June 8, 2004  

Suggested Citation

Michaud, Dennis Wright, Multinational Energy Firms in the Caspian Basin: A Bayesian Approach to Incorporate Political Risk in Corporate Strategy (February 1, 2005). Available at SSRN: http://ssrn.com/abstract=555401 or http://dx.doi.org/10.2139/ssrn.555401

Contact Information

Dennis Wright Michaud (Contact Author)
Providence Consulting Group, LLC ( email )
275 CASTLE ROCKS ROAD
WARWICK, RI 02886
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,458
Downloads: 245
Download Rank: 71,541
Footnotes:  93

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.281 seconds