This paper investigates whether multinational enterprises (MNEs) take into account both global and diplomatic political risks when investing abroad. Whereas global political risk is common to all foreign investors, diplomatic political risk is dyad-specific as it is related to the overall...

Foreign firms are likely to attempt to shape host government policies in their favour, as the profitability of MNE foreign affiliates largely depends on the business environment in which they operate. Based on data from the World Business Environment Survey, this paper investigates the political...