WHAT IS A POLITICAL HEDGE

46. What is a political hedge? a. Foreign firms doing business in a country are sometimes subject to regulations that do not apply to domestic firms, so foreign firms can employee government officials in countries to see that the firm is exempted from such regulations on foreign firms. b. Foreign firms doing business in a country are well-advised to employ locals to lobby the government of the country where the firm is doing business to provide local subsidies for the foreign firm so that the foreign firm will invest in that country. c. Since countries can impose regulations on foreign firms doing business in the country, a firm can actually invest in a country so that it is not simply a foreign firm selling in the country and potential avoid many of those regulations that apply to foreign firms. d. Political hedge is a politically correct way of referring to bribery of local officials.