Research On Sovereign Political Risk Assessment And Risk Control In Overseas Business Activities

The main theme of this paper is to study how to assess the political risk in transnational operation by quantitative method,explain the world economic background under the influence of sovereign political risk,and explain the significance and necessity of assessing and measuring the political risk of sovereignty.With the rapid development of China's economy,from the beginning of twentieth Century "go out" policy,now with the construction of "The Belt and Road China",as an open economy,is gradually perfect?But unlike the risk faced by the domestic,business and overseas activities,have to consider the host's sovereign political risk of the main country and a series of non systematic risks associated with sovereign political risk.Based on the analysis and elaboration of sovereign political risk,this paper defines the definition of sovereign political risk.From the new cause of sovereign political risk,the definition of the sovereign political risk,the development of the theory of sovereign political risk,the research method of sovereign political risk and early-warning model.And define the sovereign political risk is caused by a series of political activities(including change of policy,change of power,conflict of political groups,etc.)in the host country,which includes(but not limited)to the instability of the political,economic and social environment,which causes the operation of foreign enterprises and overseas institutions in the operation of the country.Continuity and risks that may cause assets or financial losses.On the basis of a large number of reading and studying the previous theory,the article divides the sovereign political risk into political and economic factors.In political factors,chose the idea of the ruling party,the ruling power of the political power,the performance of the ruling party,the degree of corruption,the external conflict,the international relations,the degree of perfection of the legal provisions,the enforcement of the law,the rate of unemployment,the rate of employment,the Gink coefficient,the Engel's Coefficient and the degree of religious influence are the object of the study.In economic factors,chose GDP growth rate,inflation rate,proportion of regular account account for GDP,savings rate,debt rate,debt rate,debt rate,exchange rate,foreign exchange reserve account for nine indexes of GDP,and explain the selection of these indexes respectively.Considering the difference between the characteristics of different indicators,the paper takes different ways to deal with the indicators of political factors and economic factors According to the quantitative and qualitative method of political index,the judgment matrix is constructed by the analytic hierarchy process(AHP),and the weight coefficient of each index is obtained by MALTAB software,and the traditional scoring method is optimized.In view of the economic factor index,taking into account the index characteristics to obtain the digital data,the article uses the principal component analysis and the Logit regression model to select the 1620 data of 18 years from 2000 to 2017 in ten countries through the principal component analysis and the regression model,and obtains the principal component factors by reducing the dimension,and then uses the regression analysis to get the sovereign political risk.On the basis of the conclusion of the model,from three angles,the article puts forward some strategies to deal with the sovereign political risk from the perspective of the government of the mother country,the host state government and the the enterprises and institutions.Especially for enterprises and institutions,the article also puts forward different strategies from three stages of risk assessment before the operation,risk control in the process of operation,and the withdrawal of capital after the occurrence of risk.