Classification of Risk Perceptions of Trading Firms

Abstract

Risks faced by the trading firms cannot be eliminated completely due to the reasons arising from the structure of international trade. Therefore, minimizing risk and managing it well lay down the foundation of modern risk approach. The most important element of risk management is to define and categorize the risk. This study aims at perceptual description of risk within the scope of the firms exporting agricultural products in Turkey. The main purpose is to classify the risks faced by these firms. The study uses factor analysis to determine the behavioral and perceptional dimensions of the firms; and also uses multidimensional scaling in positioning the firms’ risk perceptions. The findings show that seven dimensions namely political, economic, trade, financial, food safety and goods delivery formulate risk perception of the firms. Multi-dimensional scaling technique maps the perception under two dimensions. The results of the research can be helpful for the managers of agri-products export firms in designing risk management strategies.