Assessment of political risk factors influencing the corporate performance of multinationals construction companies in northeastern Nigeria

Abstract

The transborder extension of the services offered by multinationals construction companies that have settled in Africa exposes them to the political risk factors pertinent to the host country. This paper seeks to identify and assess the prevalence of political risk factors influencing the corporate performance of multinational companies in the North-eastern zones of Nigeria. Structured questionnaires were administered to 78 expatriates project managers from six multinationals construction companies within six states of Nigeria’s North-east area. Data collected were analysed using the relative importance index and factor analysis. Findings showed terrorism, corruption, insurgencies, sabotages and kidnapping were the five major political risk factors with the highest level of occurrence, while terrorism, kidnappings, sabotage, corruption and change in government are those with the highest impact on operations in the region. The recommendation includes the need for the Federal, State and Local Governments to provide adequate security for lives, properties and investments.

Keywords: Construction companies, corporate performance, multinationals, political risk, terrorism.