Handling Political Risks in Foreign Direct Investments: A Comparative Analysis Between German and Mexican Multinational Corporations.

In light of heightened tensions from current political developments leading to increasing political risk exposure for businesses, this thesis explores how multinational corporations (MNCs) from Germany and Mexico handle political risks in foreign direct investments (FDIs). Through a Qualitative Comparative Analysis of structured interviews, the study highlights operational differences between the two countries' MNCs. German MNCs show a greater awareness and sensitivity to political risks in their FDIs and adopt a more structured and formalized approach to political risk management and mitigation. On the other hand, Mexican MNCs emphasize flexibility and decentralization. This research addresses a gap in the literature by comparing internal political risk handling practices between MNCs from developed and emerging markets, specifically emphasizing the underrepresented case of Mexican MNCs.