What types of political risk would a company entering Russia face? Identify and describe three. What types of political risk would a company entering France face? Identify and describe three. How are these risks similar? How are they different?
Political risks when entering Russia:
- Political system is not evolving, and this is one of the major factors. They have some key political figures that represent the interest of the state.
- Some restrictions on trade and investment. The government policies sometimes restrict operations for corporations.
- Businesses entering the Russian market also face the problem of corruption. This can affect their business practices.
Political risks when entering France:
- The government puts high taxes for businesses that are operating in France.
- The firm has to understand the French republican model, otherwise the political risk will have a big effect on the company.
- Terrorism can be a major aspect as well, and can very much affect the business operations.
The similarity is that they both have political risks and a company entering the market should be aware of laws and restrictions that may later apply, and know how to avoid them.
The difference is the level of threat. Russia is considered a more threatened zone for a business to operate in, whereas France is considered more expensive.