Political Risks Faced by Investors of Direct Investment

International Journal of Civil Engineering and Technology 10(7), 2019, pp. 333-342

10 Pages Posted: 18 Sep 2019

See all articles by Fitria Dewi Navisa

Fitria Dewi Navisa

Brawijaya University, Indonesia

Suhariningsih .

Brawijaya University, Indonesia

Bambang Winarno

Brawijaya University, Indonesia

Siti Hamidah

Brawijaya University, Indonesia

Date Written: September 10, 2019

Abstract

Investment always includes risk factors to affect investment development and it can change the Indonesian economy. Foreign investors also strive to avoid losses due to political risk. Governments of the countries should guarantee the protection of foreign investment from possibility of political risk. Therefore, this study examines what are the political risks faced by direct investment investors. Researchers use certain legal theories as the analysis basis to find answers of study problem. The theories used are Legal Protection Theory, Certainty Law Theory, Investment Theory, and Insurance Theory. The approach method used is normative juridical. This study uses 4 approaches, namely the statutory approach, conceptual approach, case approach, and comparative approach. This study is descriptive analysis to express the overall symptoms of investigated aspects to explain the conditions. Political risk is the change in political environment that can have a detrimental effect on the value of company’s business activities (Griffin, Ricky: 212). Assessment of Political Risk Map is done by the RGE method (Roubini Global Economics) (Roubini, 2014: 14). Roubini Global Economics (RGE) is an independent research company, the maker of global macroeconomic strategies developed by Roubini, a well known economist. RGE method has six risk measures, namely: Exchange Transfer, Non-Sovereign Payment, Political Interference, Supply Chain Disruption, Legal and Regulatory Risk and Political Violence.

Keywords: Political Risk, Direct Investment

Suggested Citation

Dewi Navisa, Fitria and ., Suhariningsih and Winarno, Bambang and Hamidah, Siti, Political Risks Faced by Investors of Direct Investment (September 10, 2019). International Journal of Civil Engineering and Technology 10(7), 2019, pp. 333-342. Available at SSRN: https://ssrn.com/abstract=3451053

Fitria Dewi Navisa (Contact Author)

Brawijaya University, Indonesia ( email )

Department of Environment
Malaysia

Suhariningsih .

Brawijaya University, Indonesia ( email )

Department of Environment
Malaysia

Bambang Winarno

Brawijaya University, Indonesia ( email )

Department of Environment
Malaysia

Siti Hamidah

Brawijaya University, Indonesia ( email )

Department of Environment
Malaysia

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