The Impact of Market and Specific Risk on the French Economy

In business, there two primary type of risks which shall be discussed in this paper. The two include market risk and specific risk which can be defined based on how their business implications. “Specific risk”(Jennequin et al. 125; Howlett) is identified a risk that is unique, and its effects are customed to affect certain assets. On the other hand, market risk has a broad reach as a risk, and its implications can impact a particular company or an industry(Giglio et al. 457; Romero et al e0190076.). Hence it is sometimes referred to as systematic risk. In this essay, focus shall be on the consequences of both specific and market risks on the G20 country of focus.

One of the market risk facing France is a continuous rise in public debt. France has established itself as one of the competitive economies in the world, and as of 2017, it was ranked 6th in the world. Despite the rise in household consumption in France which has boosted the economy, there is a worrying trend seen in the public debt which affects the economy of France(Cournède and Denk; Milner). According to available stats, in the trimester of 2017, the public debt in France was recorded at 98.1% of the GDP.

France has established itself as a robust economic powerhouse due to its world ranking in the recent years. However, despite the notable growth, there are specific risks that affect specific sectors in France economy(Teece et al. 17). France is among the leading automotive manufacturers, and some of the specific risks faced by the vehicle manufacturing industry in France is regulations. As a member of the EU, France is subject to several regulations which tend to affect the country’s automotive industry(Dancygier and Walter). The specific risks emanating from legislation passed by EU which affect France motor industry includes EC 715/2007 on emissions and EC 661/2009 on motor vehicle safety.

Work Cited

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