This paper introduces a valuation model of international pricing in the presence of political risk. Shipments between countries are charged with shipping costs and the country specific production processes are modelled as diffusion processes. The political risk is modelled as a continous time...

For Japan, 1984-2000 includes a major financial liberalization, a stock and real estate market boom followed by a crash, plus the subsequent weakness of most Japanese banks. We examine how Japanese corporations responded in terms of overall leverage, its determinants, and the mix of bank versus...