Political Risk And Multinational Firms In Nigeria: An Empirical Investigation

Despite the flux in the political environment of Nigeria, Africa’s largest economy and an emerging market, the country has witnessed a continuous inflow of Foreign Direct Investment. This paper investigates empirically the impact of political risk on firms by statistically analysing data from 74 multinational firms in Nigeria. The results reveal that the impact of political risk on multinational firms is significantly influenced by other factors such as degree of internationalisation, perception of political risk, outcome of political risk assessment, leverage and perceived rewards of internationalisation to specific emerging markets. The differences in these factors influence the impact of political risk on multinational firms in Nigeria, thus identifying a reason why some firms
internationalise to specific countries and why some have been able to manage and mitigate political risk. The paper offers an insight into the dynamics of the relationship between political risk and multinational firms