Does Religious Freedom Affect Country Risk Assessment?

Abstract

Investors and lenders, when evaluating the risks of a country, generally base their assessment on the political and social environment of a country. Accordingly, a number of studies examining the economic and political factors affecting country risk assessment have surfaced, but no known researches have studied the impact of religious freedom, which is an influential element in the political and social environment of a country, on international business. This study analyzes the relationship between religious freedom and the three measures of country risk: ICRG, Institutional Investor and Euromoney. Although the empirical results are mixed, this article maintains that religious freedom is likely to affect the international business environment.