Episode Details

The question of how and why business and investing risk varies across countries is one that has be answered, if you are either a business making investments across the world or an investor valuing a company with operations in many countries. In this session, I review the findings from my annual update on country risk (a long and boring 100+ page paper), starting with an examination of differences on the fundamentals (political structure, exposure to violence, extent of corruption and strength of legal system) across the globe. I then look at measures of country risk, starting with default risk (in sovereign ratings and CDS spreads), moving on to country risk scores and finally to equity risk premiums. I end the post by connecting these country risk premiums to company hurdle rates, examining both why your currency choice changes your numbers but not your value judgment and how to measure company exposure to country risk.
(If you have trouble with downloads, try a different browser.)
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/CountryRisk2023.pdf
Post: https://aswathdamodaran.blogspot.com/2023/07/country-risk-july-2023-update.html
Paper on Country Risk: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4509578
Equity Risk Premiums, by country: https://pages.stern.nyu.edu/~adamodar/pc/datasets/ctrypremJuly23.xlsx

Learn more about your ad choices. Visit megaphone.fm/adchoices