Micro political risk is the risk faced by all foreign firms in a host country related to political change, revolution, and the adoption of new policies by the government of host country.

Question

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Micro political risk refers to the risk faced by a specific company or industry within a host country due to political actions or changes, rather than the broader, country-wide risks that affect all foreign firms, which is referred to as macro political risk.

Micro Political Risk Is the Risk Faced by All Foreign