Political, Economic, and Legal Risks Faced in International Projects: Case Study of Vietnam

Abstract

The aim of this research is to investigate the political, economic, and legal (PEL) risks faced by foreign firms when undertaking construction projects in Vietnam. The specific objectives are to investigate the types of PEL risks faced and the risk response techniques adopted. The data collection instrument was a questionnaire with open ended questions. The data collection method was in-depth face to face interviews with 18 experts from France, Hong Kong, Malaysia, Singapore, and the United States who have managed construction projects in Vietnam. The major risks faced include corruption, termination of public projects, bureaucratic administrative system to obtain permits and approvals, changing and inconsistent regulations, inadequate legal framework, fluctuation of exchange, and interest and inflation rates. Ways to respond to these risks are recommended by the experts. Foreign firms undertaking construction projects in Vietnam may make use of these findings to identify their PEL risks and determine the appropriate risk response measures to give their projects a higher chance of success.