How PRR Works
PRR connects political events to firm-specific business outcomes by comparing what happened, which firms were plausibly exposed, and how market-implied firm value responded.
The process
Map the firm
Build a structured profile of where the firm operates, sells, sources, and depends on government decisions. This creates a multi-dimensional exposure footprint across countries, sectors, and supply routes.
Classify the event
Each political-risk event is tagged with a date, severity, target countries, and a risk channel such as sanctions, trade policy, regulation, conflict, nationalization, or market dislocation.
Measure the observed firm-value response
For each firm-event pair, PRR measures how the firm's value changed after the event relative to an appropriate benchmark. This converts political uncertainty into a comparable firm-level signal that can be tested across events, time windows, peers, and risk channels.
Test the pattern
PRR asks: across all events of this type, do firms with higher exposure consistently respond differently? Statistical tests, robustness checks, and cross-validation separate real signal from noise.
Grade the evidence
Each firm-risk-channel pair gets an evidence grade based on statistical strength, robustness, and consistency. Strong signals get used for diligence; early signals flag areas for deeper review.
What makes PRR different
Firm-specific, not country-level
Country risk says where trouble is. PRR says how it transmits to a specific firm through specific channels.
Evidence-based, not opinion
Every signal traces back to observed market responses to real political events. No surveys, no sentiment scores.
Honest about gaps
Where evidence is thin, PRR says so. Abstention is a feature: it tells you where more diligence is needed, not less.