Risks facing foreign direct investment in Lebanon and tools of their assessment

Abstract

There is a research of risks that occur during investment process and a methodic how to calculate the total amount of necessary investment in condition of uncertainty and risks. It is formulated the main approach to investment effectiveness’ evaluation when the first step is risk assessment and its tools. The corruption is the main part of country risks facing the investors in Lebanon. Country risks are divided into economic, financial, political, cultural. Corruption is getting a culture in Lebanon. It has a three style of influence on the foreign direct investment: negative, positive and neutral. There are a list of qualitative and quantitative methods with their advantages and disadvantages which can be used in project management. The main tools of evaluating risks are the discount rate adjustment method, confidence coefficient method, sensitivity analysis of performance criteria, Monte-Carlo simulation. There is a discussion about the more appropriate tools of corruption risk evaluation in the article.