POLITICAL risk is not just a foreign phenomenon. For example, the U.S. Justice Department is considering extending the reach of its antitrust enforcement by holding the U.S. subsidiary of a foreign company responsible for the anticompetitive actions of its parent in foreign markets to which U.S. firms export. According to the New York Times, "if Japanese auto makers were found to be part of anti-competitive arrangements that restrict markets for American cars or auto parts in Japan, the United States could strike at the American subsidiaries of those companies."2 The subsidiaries held responsible would be subject to the payment of treble damages for the actions of their foreign parent, even if the actions of the parent were legal in its home market. A firm's choice of business organization appears to be associated with its political risk. For example, the Payline Group, which was part of