All Theses, Dissertations, and Capstone Projects

Year of Award



Master of Business Administration (MBA)


College of Business & Professional Studies

Degree Program



Business Administration


Foreign Investment, International Investment, Guyana, World Development, Political Stability, Aluminum, Demba


This paper will show that despite the need for extension of foreign direct investment in the form of multinational corporations to capital-scarce, developing countries, political risk creates a gap between the demand and supply of foreign investment.

In Chapter II, the patterns of foreign direct investment are analyzed. Chapter III reviews the various sources of political risk and concludes that the existence of political risk is an obstacle to the formation of an optimum investment level. Political risk may take the form of new operation restriction, nationalization and expropriation of a corporation. Chapter IV discusses the relative positions of the developing countries and the multinational corporations. The lack of experience in the new independent countries leads to impasses. By the time experience is gained, many corporations can be hurt. Chapter V presents a case study which illustrates the effects of political risk on foreign direct investment. This case relates to the nationalization of aluminum mines after the independence of Guyana. Chapter VI suggests ways the political risk could be minimized.

Finally, the conclusion of the research briefly summarizes the role of political risk in foreign direct investment.

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