Country Risk

economics

A group of risk factors associated with trading with, operating in, lending to, or holding the assets of an individual, business, or governmental entity of a particular country. These risks relate to the political, economic or social instability of a country.

A number of organizations that specialize in country risk analysis create composite indexes of country risk based upon the type of transaction contemplated with a legal person or entity of another country.

Country risk can be based on a multitude of factors, including a country’s economic and political policies, government intervention in the business community, legal system and enforcement, transparency, copyright and patent law and enforcement, inflation, exchange rates, bribery, regional issues such as political and civil unrest, war, and crime among others.

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