Document Type Master's Dissertation Author Kriel, Lourandi URN etd-07142012-192608 Document Title The relationship between political risk and financial performance of firms in Africa Degree MBA Department Gordon Institute of Business Science Supervisor
Advisor Name Title Prof A Wöcke Supervisor Keywords
- financial performance
- political risk
- emerging market
Date 2012-03-08 Availability unrestricted AbstractAfrica as an emerging market offers firms from Multinational Corporations (MNCs) significant opportunities to expand and capitalise on the continents economic growth and combined consumer spending. Africa has significantly higher levels of state fragility and political risk in comparison to the rest of the World. Managers of firms looking to enter the African market need to analyse political risk in Africa when the firm risk taking and financial return relationship is considered.
The objective of this research study was to establish if there is a relationship between political risk and financial performance of firms in Africa. This study used various financial performance ratios of 406 firms operating in five African countries and numerous country political risk variables to investigate if such a relationship exist over an eight year period.
The findings indicate that there is a positive political risk financial return relationship for firms operating in Africa. Firms seem to achieve higher financial performance results in countries with higher overall political risk. This study suggest that African countries need to be analysed on an individual basis when considering political risk and published political risk data should not be used for decision making without deeper understanding and analyses of the country.
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Please cite as follows:
Kriel, L 2011, The relationship between political risk and financial performance of firms in Africa, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-07142012-192608/ >
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