Economic Approach to Conflict Issue: Investment in Post- Conflict Situation for International Business

Abstract

The latest Global Economic Crisis and the latest Sovereign Crisis in the euro area have substantially deepened. Financial and economic conditions became a challenging matter for many investors and business organizations. The latest economic outlook is also prominent problem of researchers questioning the methods of sustaining long term interethnic peace in post- conflict countries (PCCs) and economies whilst the economic slowdown has effects on prosperity and development. In this study, it is aimed to develop an interdisciplinary approach to conflict issue within a theoretical framework in order to contribute to success of strategic decision making process at corporate level. Strategy makers at this level must evaluate the nature of conflict and develop conceptual skills before attempting to invest in conflict-prone economies. In this study, economic dimensions of conflict and its effect on investment climate have been evaluated to guide international business organizations. This study demonstrates that (i) there is strong tie between economic conditions and conflict risk, (ii) an increase in employment and income level in post conflicted economies is likely to decrease the probability of future conflict risk among interethnic groups (iii) inequality of income and resource distribution priorities among members of different ethnic groups escalate the risk of conflict, subsequently (iv) the success in the process of economic rehabilitation and recovery is a key contributory factor in sustaining peace and prosperity.