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Because political events can determine the success or failure of an investment abroad, transnational companies must make every effort to analyze political risks as part of the decisionmaking process.
States and Companies, written especially for students of international business and executives of transnational companies, presents a conceptual framework for the analysis of political risk. Although the author focuses his study on the international oil industry, his explanatory model of political risk is applicable to most transnational companies. Lax's study is important because it focuses on developing a context for understanding political risk rather than simply offering a predictive methodology. He provides the theoretical groundwork for this understanding by explaining political risk in terms of a broader theory of interaction between host states and transnational corporations. The inherent conflict of interests and issues hierarchies between these two actors, Lax argues, is the root cause of political risk.
About the author
HOWARD L. LAX is a research professional with a diversified background in both academic and business settings who is currently senior vice president and chief operating officer of Trans Data Corporation, a market research firm specializing in the financial services industry. Dr. Lax has done extensive research in the field of political risk and international oil politics, both academically and professionally. He has published numerous articles and books on topics in international politics, political economy, and political risk. He taught political science at the City University of New York and has worked as a consultant in the field of mineral economics.
