It’s the law 4.1 “dos and don’ts” for exporting to north korea

North Korea is one of the world’s most centralized economies. Agricultural production is collectivized, state-owned industry produces nearly all manufac- tured goods, and the heavy and military industries have traditionally been favored at the expense of con- sumer goods. North Korea’s major industries include military and machinery production, chemical produc- tion, mining (coal, iron ore, magnesite, graphite, copper, zinc, lead and precious metals), metallurgy, textiles, and food processing.

Dos

■ Be sure that the ultimate purchaser and end-user of the items is not associated with North Korean missile technology exports. This is especially important when a license is not required (e.g., export of an EAR99 item).

■ Be aware of the instability of the North Korean

financial sector. There is little, if any, fungible capital in the consumer economy since everything is provided by state enterprises. Initially, cash deals with prepayment may be the best way to structure your exports to the North Korean government until you gain confidence that you can be paid by more conventional (e.g., electronic, letters of credit) methods.

■ US exporters are encouraged to establish direct

contact with the North Korean government, either in Pyongyang itself, through the North Korean mission to the United Nations or the North Korean embassy in Beijing, to ascertain DPRK laws and regulations for doing business in North Korea.

Familiarize yourself with North Korean import guidelines.

■ Be sure to make whatever agreements you reach

with prospective customers in North Korea con- tingent on your receiving an appropriate US Department of Commerce export license for the particular export transaction, if goods require a license.

Don’ts

■ Don’t assume that North Korea is like a Western environment for business and investment.

■ Don’t expect there to be any real infrastructure

for your proposed production or assembly venture in North Korea, or assume that basic industrial resources such as water, electricity, roads, or air- ports will be available.

■ Don’t mix controlled and noncontrolled goods in

shipments to North Korea.

■ Be wary of doing noncash deals, at least until you are comfortable with the payment performance of your North Korean customer.

■ Don’t expect your customer to obtain the neces-

sary import, export or tariff permits for doing busi- ness in North Korea, unless this is required. You are better off approaching North Korean govern- ment officials directly with your request.

■ Don’t ship anything on the Commerce Control List.

There is a presumption of denial for all controlled goods to North Korea.

Source: William Golike and Chris Chesterfield, “Export

Restrictions on North Korea,” Export America, 13.

The rapid changes in Eastern Europe present both challenges and opportunities. In the former days of centralization, a trade minister in the capital could speak for the entire nation, but with decen- tralized decision making, an MNC has to go to the many republics for information and approval. When doing business there, companies need to be creative in terms of long-term thinking and financing.

MEASURES TO MINIMIZE POLITICAL RISK

Political risk, though impossible to eliminate, can at the very least be minimized. There are several measures that MNCs can implement in order to discourage a host country from taking control of MNC assets.

Stimulation of the local economy

One defensive investment strategy calls for a company to link its business activities with the host country’s national economic interests. Brazil expelled Mellon Bank because of the banks’ refusal to cooperate in renegotiating the country’s massive foreign debt.

A local economy can be stimulated in a number of different ways. One strategy may involve the company purchasing local products and raw mate- rials for its production and operations. By assisting local firms, it can develop local allies who can provide valuable political contacts. A modification of this strategy would be to use subcontractors. For example, some military tank manufacturers tried to secure tank contracts from the Netherlands by agreeing to subcontract part of the work on the new tanks to Dutch companies.

In 1985, all the Toyota vehicles sold in America were imported. This practice is no longer in place. Toyota now produces more than half a million vehicles each year in Kentucky and California. The company has invested more than $5 billion in American operations, not counting another $6.2 billion through its Toyota, Lexus, and Toyota Industrial Equipment dealers. It works with more than 400 US suppliers to forge economic ties, and its purchases of American parts and materials have risen to more than $5 billion annually. Toyota boasts that nearly every dollar earned by its US operations since US manufacturing began has been reinvested in American payrolls, purchases, plants, and other facilities. The company’s American factories and dealerships employ 123,000 Americans, more than Coca-Cola, Microsoft, and Oracle combined. Toyota’s top executives in the USA are increasingly American. The success is easy to see: Toyota is now selling more vehicles in the USA than in Japan, and almost two-thirds of the company’s operating profit is derived from the US market.³⁸

Sometimes local sourcing is compulsory. Governments may require products to contain locally manufactured components because local content improves the economy in two ways: (1) it

stimulates demand for domestic components, and (2) it saves the necessity of a foreign exchange trans- action. Further investment in local production facil- ities by the company will please the government that much more. At one time IBM was the only foreign company allowed to sell switchboards in France because the firm’s PBXs were made there.

Finally, the company should attempt to assist the host country by being export oriented. Both United Brands and Castle and Cooke were able to survive the Sandinista revolution in Nicaragua by imple- menting this strategy. Their export dollars became vital to the Nicaraguan government, thus shielding their Latin American operations from expropria- tion. AT&T was able to enter the French telephone switch market by agreeing to assist CGE, a French nationalized switch maker, in selling smaller digital switches in the USA.

Employment of nationals

Frequently, foreigners make the simple but costly mistake of assuming that citizens of less developed countries are poor by choice. It serves no useful purpose for a company to assume that local people are lazy, unintelligent, unmotivated, or uneducated. Such an attitude may become a self-fulfilling prophecy. Thus the hiring of local workers should go beyond the filling of labor positions. United Brands’ policy, for example, is to hire only locals as managers.

Firms should also carefully weigh the impact of automation in a cheap-labor, high-unemployment area. Automation does not go down well in India, where job creation, not job elimination, is national policy. Technology is neither always welcomed nor always socially desirable. An inability to automate production completely does not necessarily consti- tute a negative for MNCs. MNCs may gain more in less developed countries by using “intermediate technology” instead of the most advanced equip- ment. Intermediate technology, accompanied by additional labor, is less expensive, and it promotes goodwill by increasing employment.

Sharing ownership

Instead of keeping complete ownership for itself, a company should try to share ownership with others, especially with local companies. One method is to convert from a private to a public company or from a foreign to a local company. Dragon Airline, claim- ing it is a real Chinese company, charged that Cathay Pacific Airways’ Hong Kong landing rights should be curtailed because Cathay Pacific was more British than Chinese. The threat forced Cathy Pacific to sell a new public issue to allow Chinese investors to have minority interests in the company. The move was made to convince Hong Kong and China that the company had Chinese roots.

One of the most common techniques for shared ownership is to simply form a joint venture. Any loss of control as a result can, in most cases, be more than compensated for by the derived benefits. United Brands’ policy in South America is not to ini- tiate any business unless local joint-venture partners can be found to help spread the risk.

In some overseas business ventures, it is not always necessary to have local firms as partners. Sometimes, having co-owners from other nations can work almost as well. Having multiple national- ity for international business projects not only reduces exposure; it also makes it difficult for the host government to take over the business venture without offending a number of nations all at once. The political situation in South Africa was one of the reasons Ford chose to merge its automobile opera- tions there with Anglo American. The merger reduced Ford’s exposure to a 40 percent minority position.

Voluntary domestication, in most cases, is not a desirable course of action because it is usually a forced decision. The company should therefore plan for domestication in advance instead of waiting until it is required, because by that time the company has lost much of its leverage and bargaining power. This strategy is also likely to be perceived as a gesture of goodwill, an accomplishment in addition to the desired reduction of exposure. A wise strategy may be for the company to retain the marketing or

technical side of the business while allowing heavy local ownership in the physical assets and capital- intensive portions of the investment.

Being civic minded

MNCs whose home country is the USA often encounter the “ugly American” label abroad, and this image should be avoided. It is not sufficient that the company simply does business in a foreign country; it should also be a good corporate citizen there. To shed this undesirable perception, multinationals should combine investment projects with civic projects.

Corporations rarely undertake civic projects out of total generosity, but such projects make eco- nomic sense in the long run. It is highly desirable to provide basic assistance because many civic entities exist in areas with minimal or nonexistent munici- pal infrastructures that would normally provide these facilities. A good idea is to assist in building schools, hospitals, roads, and water systems because such projects benefit the host country as well as the company, especially in terms of the valuable good- will generated in the long run. Toyota has invested in local communities. A portion of its US profits is allocated each year to support community programs. Over a period of three years, it has con- tributed $38 million to such philanthropic organi- zations as United Negro College Fund, Teach for America, and Special Olympics. In addition, the company spent more than $1.5 million to help the victims of the Midwest floods, East Coast hur- ricanes, and the fires and earthquakes in California.

There are many examples of global philanthropy. It is wise to remember that in many less developed countries, a small sum of money can go a long way.

Political neutrality

For the best long-term interests of the company, it is not wise to become involved in political disputes among local groups or between countries. A company should state clearly but discreetly that it is not in the political business and that its primary

concerns are economic in nature. Brazilian firms employ this strategy and keep a low profile in matters related to Central American revolutions and Cuban troops in foreign countries. Brazilian arms are thus attractive to the Third World because those arms are free of ideological ties. In such a case, a purchasing country does not feel obligated to become politically aligned with a seller, as when buying from the USA or China.

Behind-the-scenes lobby

Much like the variables affecting business, political risks can be reasonably managed. Companies as well as special interest groups have varying interests, and each party will want to make its own opinion known. When the US mushroom industry asked for a quota against imports from China, Pizza Hut came to China’s rescue by claiming that most domestic and other foreign suppliers could not meet its spec- ifications. Pizza Hut has a great deal at stake because it is one of China’s largest customers as well as a user of half of some nine million pounds of mush- rooms for pizzas – not to mention the desire of PepsiCo, its parent, to open a factory in southern China. Subsequently, the petition of the US mush- room industry was denied.

When practical, firms should attempt to influ- ence political decisions. Mobil Corporation, for example, ran newspaper advertisements emphasiz- ing the importance of the USA–China relations (see Figure 4.3).

Even though a firm’s operation is affected by the political environment, the direction of the influ- ence does not have to flow in one direction only. Lobbying activities can be undertaken, and it is wise to lobby quietly behind the scenes in order not to cause unnecessary political clamor. For importers, they must let their government know why imports are crucial to them and their consumers.

Companies may not only have to lobby in their own country, but they may also have to lobby in the host country. Companies may want to do the lobbying themselves, or they may let their govern- ment do it on their behalf. Their government can

be requested to apply pressure against foreign governments.

Observation of political mood and reduction of exposure

Marketers should be sensitive to changes in politi- cal mood. A contingency plan should be in place. When the political climate turns hostile, measures are necessary to reduce exposure. Some major banks and MNCs took measures to reduce their exposure in France in response to a fear that a Socialist–Communist coalition might gain control of the legislature in the elections of 1978. Their concern was understandable, since most of these companies were on the Left’s nationalization list. Their defensive strategy included the outflow of capital, the transfer of patents and other assets to foreign subsidiaries, and the sale of equity holdings to foreigners and French nationals living abroad. Once concluded, such activities made it difficult for the socialist government to nationalize the com- panies’ properties. Prudence required that these transactions be kept quiet so as to avoid reprisals.

Other measures

There are a few other steps that MNCs can under- take to minimize political risk. One strategy could involve keeping a low profile. Because it is difficult to please all the people all the time, it may be desir- able for a company to be relatively inconspicuous. For example, in the 1980s, Texas Instruments removed identifying logos and signs in El Salvador.

Another tactic could involve trying to adopt a local personality. A practice approach may require that the company blend in with the environment. There is not much to be gained by a company being ethnocentric and trying to Americanize, Euro- peanize, or Japanize the host country’s citizens. A veteran of international business would very likely realize that it is far better to be flexible and adapt- able. Such a firm would know that it should behave like a chameleon, adapting itself to fit the environ- ment. The main reason that McDonald’s uses local

Figure 4.3 Politics and economics

Source: Mobil Corp.

corporate staff is to make it look like a local company.This is also the goal of Hawley Group.That company is thought to be American in the USA, British in the United Kingdom, and Australian in Australia.

Multinational firms, due to their presence in a large number of countries, must be mindful of ter- rorist threats. According to the World Markets Research Center, the top ten countries deemed to be the most likely targets of a terrorist attack are: (1) Colombia, (2) Israel, (3) Pakistan, (4) the USA, (5) the Philippines, (6) Afghanistan, (7) Indonesia, (8) Iraq, (9) India, and (10) the United Kingdom.³⁹

A survey of US-based MNCs found that less than

50 percent had formal programs to deal with a ter- rorist attack.⁴⁰ Most of the MNCs with anti-terror- ist programs focus on security equipment rather than on training executives and their families. Some of the activities included in anti-terrorist training are: defensive driving, self-defense, kidnap- ping avoidance, behavior after/during kidnapping,

negotiating skills, weapon handling, collecting information from local sources on terrorists, and protection of assets.

Finally, various defensive precautions can be implemented. Automobile drivers should be trained in how to react to a kidnapping attempt, and man- agers themselves should be instructed in how to deal with the unexpected and taught especially to avoid driving routine routes. Very basic precau- tions might be undertaken. For example, in El Salvador, Texas Instruments erected protective walls for its facilities and employed extra guards. It is better to be safe than sorry (see Marketing Strategy 4.1).

POLITICAL INSURANCE

In addition to the strategies of risk avoidance and risk reduction, MNCs can employ the strategy of risk shifting. Insurance coverage may be obtained from a number of sources.

MARKETING STRATEGY 4.1 BETTER SAFE THAN SORRY

Chubb, IG and Lloyd’s of London are among a small group of insurers which have long offered policies to cover ransom demands for kidnappers. The coverage has been expanded to include legal and psychiatric fees, and compensation for loss of trade secrets and product tampering. Some policies may cover costs incurred when evacuating a politically unstable country. Executives may receive training on how to avoid being kidnapped.

Premiums may run from $1000 to $100,000 a year – depending on the coverage. The premium also varies according to the countries which executives visit most often. As an example, the premium is higher if it involves Latin America, and lower in the case of Europe and Japan. Individuals may buy the insurance if their employers do not provide such a cov- erage. There is extra cost to cover accidental death and dismemberment. Since it is illegal to purchase

ransom insurance in Germany and Colombia, execu- tives visiting these countries need to buy the coverage elsewhere.

The US government sent $50 billion to state and

local governments for homeland security, and private contractors will benefit from it. Security companies guard against employee theft, train bodyguards in eva- sive driving techniques, teach executives to minimize dangers (e.g., no name and title on a limousine win- dow), and arrange ransom payoffs.They currently offer emergency response (e.g., evacuation and repatriation of overseas personnel), business continuity (e.g., back- ing up the data system and anti-hacker defenses), vulnerability assessment (e.g., identifying weak points in anti-terror defense), and background checks (identifying problem workers and subcontractors).

Source: “Your Jitters Are Their Lifeblood,” Business Week, April 14, 2003, 41.

Private insurance

Through ignorance, a large number of companies end up as self-insurers. A better plan would be to follow Club Med’s example by shifting political risk to a third party through the purchase of political insurance.

Some insurance companies even insure sales and profits. British Aerospace, for example, has a $70 million policy that guarantees $3.7 billion in revenue from aircraft leasing until the end of 2013. Honeywell has a blanket policy to insure its foreign exchange exposure and other risks, and may expand to include interest rate hedges, weather, and com- modity prices.

Currency inconvertibility is often the most common type of political risk claim. A coverage of this type does not protect against currency devalu- ation. On the other hand, political violence (e.g., civil disturbances and wars) has been increasing. In addition, political disruption can stem from such multilateral bodies as the United Nations, and the disruption includes sanctions and embargoes. Once a company plans to cover commercial risk, it may as well include political risk. After all, the extra premium is not that great.⁴¹

Although property expropriation seems to be the most common reason for obtaining political insurance, the policy should include coverage for kidnapping, terrorism, and creeping expropriation. Information about most companies’ coverage is rather scarce, since it is both imprudent and imper- missible for companies to reveal that they are car- rying kidnap insurance. Revelation of such coverage would only serve to encourage such activity. While AIG and other insurers have been offering corpo- rate and individual kidnapping-and-ransom insur- ance policies for quite some time, Chubb now offers a free kidnapping-and-ransom upgrade for home- owners’ insurance.⁴²

Government insurance

MNCs do not have to rely solely on private insurers. There are nonprofit, public agencies that can provide essentially the same kind of coverage.

For US firms, the two primary ones are OPIC and

FCIA.

Overseas Private Investment Corporation (OPIC) is a US government agency that assists eco- nomic development through investment insurance and credit financing programs. It is a business- oriented agency whose purpose is to support US private investments. Chartered by Congress in

1981, OPIC is a financially self-sustaining, indepen- dent corporation that receives no public funds. Its contracts, however, are fully backed by the US government, a sole owner of the corporation.

OPIC provides several forms of assistance, with political risk insurance as its primary business. It has three type of insurance protection to cover the risks of: (1) currency inconvertibility, (2) expropriation (including creeping expropriation), and (3) loss or damage caused by war, revolution, or insurrection. A typical insurance contract runs for up to twenty years at a combined annual premium of 1.5 percent for all three coverages. Considering that private insurers issue a three-year policy, OPIC’s coverage is a positive feature. OPIC’s assistance was instru- mental in Motorola Inc.’s decision to enter the Nicaraguan market to install, operate, and maintain a cellular telephone service.

The USA has the Ex-Im Export Credit Insurance Program to help American exporters and their export activities by protecting them against risks of nonpayment for political or commercial reasons. Political risks of default, often beyond a buyer’s control, are caused by government action, and examples of such risks are political violence or war, government intervention, or cancellation of a firm’s license. In contrast, a commercial risk stems from the buyer’s inability to fulfill one’s payment obliga- tions. This US program thus offers policies that cover single or multiple export sales and leases. Short-term policies cover 100 percent of principal for political risk and 90 to 95 percent for commer- cial risk, plus a specified amount of interest. Capital goods may be insured for up to five years under a medium-term policy.

Foreign Credit Insurance Association

(FCIA) is an association of some fifty leading US

companies in the marine and casualty insurance field. Created in 1961, FCIA makes it possible for US firms to become internationally competitive by insuring US exports of both goods and services against commercial and political risks.

MIGA

MIGA (Multilateral Investment Guarantee Agency) was established in 1988 to help its more than 100 member states create an attractive investment climate. Its mission is to promote private invest- ment in developing countries through insuring investment against noncommercial (i.e., political) risk. MIGA works as a co-insurer with, or a reinsurer of, other insurers. It offers four types of coverage: currency transfer, expropriation, war and civil disturbances, and breach of contract. Premiums depend on the type of project, type of coverage, and project-specific conditions. Annual premiums for each coverage are in the range of 0.50 to 1.25 percent of the amount insured. MIGA’s rates are slightly higher than those of other national insurers.

In sum, when it comes to political risk, com- panies tend to be reactive. As a result, they often have to devise an expensive strategy to deal with damage control. It is much more desirable to be proactive by developing a comprehensive and sys- tematic view of the factors that drive risks.⁴³ There are three basic sets. First, there are external drivers such as political instability (e.g., coups and riots) and poor public policy (e.g., hyperinflation and cur- rency crises). Second, interaction drivers are based on relationships between a company and external actors. Finally, internal drivers include the company’s quality of its political risk management processes. In general, the company is not in a posi- tion to influence external drivers (e.g., making a host country more politically or economically stable). It should therefore focus on assessing risks and managing their impacts. As an example, since kidnapping is a significant risk, one should assess the likelihood of its occurrence. In statistical terms, it is more likely for a person to become a road traffic accident victim than a kidnap victim. On the other hand, being kidnapped and held for ransom is arguably the most traumatic experience for anyone. As such, firms should train their employees to take precautions and may want to offer them kidnapping and ransom insurance.

QUESTIONS

1 Explain the multiplicity of political environments.

2 Distinguish between parliamentary (open) and absolutist (closed) governments.

3 Distinguish among these types of governments: two-party, multi-party, single-party, and dominated one-party.

4 Distinguish among these economic systems: communism, socialism, and capitalism.

5 Is country stability a function of (a) economic development, (b) democracy, (c) capitalism?

6 Explain: confiscation, expropriation, nationalization, and domestication.

7 What is creeping expropriation? What is its economic impact on foreign investors?

8 What are the potential sources and indicators of political instability?

9 How can a company do country-risk analysis for investment purposes?

10 Explain these methods of political-risk management: avoidance, insurance, negotiating the environment, and structuring investment.

11 What measures can be undertaken to minimize political risk?

12 What is OPIC and how can it assist US investors abroad?

13 What is FCIA and how can it assist US investors abroad?

14 What is MIGA and how can it assist international marketers?

DISCUSSION ASSIGNMENTS AND MINICASES

1 According to Harvey E. Heinbach, a vice-president of Merrill Lynch, “You’re better off making any car in Japan than in the US. But the political realities don’t allow that.” Discuss this comment from both economic and political perspectives and as related to the USA and Japan.

2 Why is a host country (including the USA) not always receptive to foreign firms’ investment in local pro- duction facilities?

3 Once viewing each other with great distrust, the USA and China have dramatically improved their economic and political ties. What are the reasons for this development?

4 How likely is it for a country to adopt a system of either 100 percent capitalism or 100 percent communism?

5 Is capitalism the best system – economically as well as socially – for all countries?

6 Indonesia is a country of approximately 200 million citizens. This is a land where Islam, Christianity, and Hinduism coexist. It is a land where there is a huge income gap between the wealthy ethnic Chinese and the remaining 190 million Indonesians. It is also the land which had been ruled for decades with an iron hand by President Suharto who was then in his seventies. Suharto, while calling for more political openness, had ruled like a military strongman. His 1994 crackdown included closures of publications, beatings of demon- strators, and arrests of labor activists. The country, at the time appeared to be relatively stable.

How should Indonesia’s type of government be classified: two-party, multi-party, single-party, or dominated

one-party? In addition, assess Indonesia in terms of market potential and risks.

NOTES

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2 George F. Will, “Steel Industry Extracts Billions from Bush,” San José Mercury News, March 8, 2002.

3 “China,” Business Week, October 29, 2001, 48–52.

4 Richard Tansey and Michael R. Hyman, “Dependency Theory and the Effects of Advertising by Foreign-Based

Multinational Corporations in Latin America,” Journal of Advertising 23 (March 1994): 27–42.

5 John Kay, “A Poor View of Poverty,” Financial Times, July 25, 2001.

6 “Politics and Budgets,” IMF Survey, February 17, 2003, 42–3.

7 Freedom in the World 2002: Freedom Gains Despite Global Threats, Freedom House.

8 Freedom of the Press 2003: A Global Survey of Media Independence (Freedom House), www.freedom- house.org/pfs2003/pfs2003.pdf.

9 Fareed Zakaria, The Future of Freedom: Illiberal Democracy at Home and Abroad (New York, NY: Norton,

2003).

10 Amy Chua, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global

Instability (New York, NY: Doubleday, 2002).

11 “Fischer Reviews His Eventful Seven-Year Tenure,” IMF Survey, September 3, 2001, 278.

12 Gary S. Becker, “As Role Models Go, Sweden Is Suspect,” Business Week, July 9, 1990, 14.

13 Alfred D. Chandler, Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, MA: Belknap

Press, 1990).

14 “Will China Follow WTO Rules?” Business Week, June 5, 2000, 42–3.

15 2003 Index of Economic Freedom, The Heritage Foundation/Wall Street Journal.

16 Pradeep K. Mitra and Marcelo Selowsky, “Lessons from a Decade of Transition in Eastern Europe and the

Former Soviet Union,” Finance & Development (June 2002): 48–51.

17 Stanley Fischer and Ratna Sahay, “Taking Stock,” Finance & Development (September 2000): 2–6.

18 “Copper Mining in Chile,” IMF Survey, June 7, 1999, 191.

19 Franklin R. Root, Foreign Market Entry Strategies (New York, NY: AMACOM, 1982), 146.

20 Michael S. Minor, “The Demise of Expropriation as an Instrument of LDC Policy, 1980–1992,” Journal of

International Business Studies 25 (No. 1, 1994): 177–88.

21 Overseas Private Investment Corporation (Washington, DC: OPIC), 2.

22 “US Oil Giants Are Slow to Invest in Russia,” San José Mercury News, January 13, 2003.

23 “BP to Own Half of New Russian Energy Company,” San José Mercury News, August 30, 2003.

24 Ira W. Lieberman, “Privatization: The Theme of the 1990s: An Overview,” Columbia Journal of World

Business 28 (spring 1993): 8–17.

25 Ravi Ramamurti, “Why Are Developing Countries Privatizing?” Journal of International Business Studies

23 (No. 2, 1992): 225–49.

26 Gary S. Becker, “Rule No. 1 in Switching to Capitalism: Move Fast,” Business Week, May 29, 1995, 18.

27 “Reforming Centrally Planned Economies: What Have We Learned?” IMF Survey, August 9, 1993, 241,

247–51.

28 Igor Filatotchev et al., “Effects of Post-Privatization Governance and Strategies on Export Intensity in the

Former Soviet Union,” Journal of International Business Studies 32 (fourth quarter, 2001): 853–71.

29 Wroe Alderson, Dynamic Marketing Behavior (Homewood, IL: Richard D. Irwin, 1965); Sak Onkvisit and

John J. Shaw, “Myopic Management: The Hollow Strength of American Competitiveness,” Business Horizons

34 (January to February 1991): 13–19.

30 Janusz Bugajski, “Eastern Europe in the Post-Communist Era,” Columbia Journal of World Business 26 (spring 1991): 5–9.

31 Yadong Luo, “Toward a Cooperative View of MNC–Host Government Relations: Building Blocks and

Performance Implications,” Journal of International Business Studies 32 (third quarter, 2001): 401–19.

32 Timothy P. Blumentritt and Douglas Nigh, “The Integration of Subsidiary Political Activities in Multinational

Corporations,” Journal of International Business Studies 33 (first quarter, 2002): 57–77.

33 Suk Hun Lee, “Relative Importance of Political Instability and Economic Variables on Perceived Country

Creditworthiness,” Journal of International Business Studies 24 (No. 4, 1993): 801–12.

34 Jean-Claude Cossett and Jean Roy, “The Determinants of Country Risk Ratings,” Journal of International

Business Studies 22 (No. 1, 1991): 135–42.

35 Llewellyn D. Howell and Brad Chaddick, “Models of Political Risk for Foreign Investment and Trade: An

Assessment of Three Approaches,” Columbia Journal of World Business 29 (fall 1994): 70–91.

36 Jennifer M. Oetzel, Richard A. Bettis, and Marc Zenner, “Country Risk Measures: How Risky Are They?”

Journal of World Business 36 (No. 2, 2001): 128–45.

37 Kent D. Miller, “A Framework for Integrated Risk Management in International Business,” Journal of

International Business Studies 23 (No. 2, 1992): 321.

38 “The Americanization of Toyota,” Business Week, April 15, 2002, 52–4.

39 “Report: US Ranks 4th in World for Terror Risk,” San José Mercury News, August 17, 2003.

40 Michael G. Harvey, “A Survey of Corporate Programs for Managing Terrorist Threats,” Journal of

International Business Studies 24 (No. 3, 1993): 465–78.

41 Kit Ladwig, “Political Risk Coverage – Is It Worth It?” Collections and Credit Risk, February 2001, 43–5.

42 “Insurance Imitates Art,” Business Week, January 22, 2001, 16.

43 Marvin Zonis and Sam Wilkin, “Driving Defensively through a Minefield of Political Risk,” Mastering Risk, Financial Times, May 30, 2000.

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