 Offshore outsourcing and political risk: India in 2004Niranjan Chipalkatti, Bruce Koch and Meenakshi Rishi International Journal of Business and Emerging Markets, 2013, vol. 5, issue 4, 285-303 Abstract: The results of the 2004 Indian elections were surprising as the victory of the Congress party was unforeseen by most pre-poll and exit surveys. The unexpected political change, with an associated shift from a centre-right to a centre-left government presented an unanticipated discontinuity in the business environment. We examine whether US companies that had offshored to India faced heightened levels of political risk when election results were announced. A unique contribution of the paper is that we also examine whether US companies that offshored to India in early-2004, faced greater political risk than companies that offshored to the country in 2002 and 2003. Results indicate an increase in political risk as manifested as an increase in systematic risk. Companies that offshored in 2004 faced greater political risk as compared to companies that offshored earlier. Our findings validate the use of a political risk premium when evaluating offshore ITES projects. Keywords: offshore outsourcing; political risk premium; democracy; Indian elections; political coalitions; systematic risk; firm returns; India; US firms; USA; United States. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbema:v:5:y:2013:i:4:p:285-303 Access Statistics for this article More articles in International Journal of Business and Emerging Markets from Inderscience Enterprises Ltd |
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