Real Estate Is Increasingly Global, But Risks Still Abound
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Country risk is the risk that cross-border cash flows will not be realized because of disequilibrium between the domestic platform and that of another country. Given this potential concern, one may require higher returns from an investment as an offsetting factor. Factors that influence country risk can be partitioned a number of ways. We use a simple, two-factor approach:
Political risk. Political risk is concerned with government structure, policy, leadership and stability, conflicts, tensions and war, politican parties and bureaucracy. A measurement of political risk would attempt to capture the degree of movement along the continuum of political freedoms that lead to stable environments over time. Much of the research to date has tended to use qualitative factors in such measurement…
Real Estate Is Increasingly Global, But Risks Still Abound
