Abstract
In this paper, we develop a model using a conditional Poisson process for measuring the effect of a countable number of mutually dependant political risks on the outcome of foreign direct investment. We also apply a Bayesian updating process that makes it possible to re-estimate the model's parameters as new information becomes available. We then show how the model can be operationalized and provide a comparative example related to foreign direct investment. (JEL G31, D81, F21).
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Clark, E., Tunaru, R. Quantification of political risk with multiple dependent sources. J Econ Finan 27, 125–135 (2003). https://doi.org/10.1007/BF02827214
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DOI: https://doi.org/10.1007/BF02827214