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Determinants of Sovereign Ratings in Emerging Countries: A Qualitative, Dependent Variable Panel Data Analysis

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  • Burhan Kabadayi

    (Erzincan University, Erzincan, Turkey,)

  • Ahmet Alkan elik

    (Beykent University, stanbul, Turkey)

Abstract

The aim of this paper is to study determinants of sovereign ratings of emerging countries. The effects of macroeconomic and political variables on the ratings are analyzed by probit and logit panel data analysis. This empirical research determines whether the sovereign ratings of emerging countries are independent of macroeconomic indicators of these countries. It might be vital to know the effects of macroeconomic variables on sovereign rating for politicians, foreign investors, monetary authorities and academicians. Thus, we need efficient and strong models explaining sovereign rating. In the empirical model of the study, qualitative and dependent variable models were used to check the effects of current account deficits, external debts, gross domestic product per capita, real exchange rates, inflations, savings rates and political qualities on sovereign ratings that are exported by three large rating agencies' (S & P, Moodys and Fitch). The results show that macroeconomic political variables affect sovereign ratings

Suggested Citation

  • Burhan Kabadayi & Ahmet Alkan elik, 2015. "Determinants of Sovereign Ratings in Emerging Countries: A Qualitative, Dependent Variable Panel Data Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 656-662.
    • Handle: RePEc:eco:journ1:2015-03-04
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    Cited by:

    1. Oliver Takawira & John W. Muteba Mwamba, 2022. "Sovereign Credit Ratings Analysis Using the Logistic Regression Model," Risks, MDPI, vol. 10(4), pages 1-24, March.
    2. Guellil, Mohammed Seghir & Sari-Hassoun, Salah Eddine & Chica-Olmo, Jorge & Saraç, Mehmet, 2022. "What are the main factors driving behind the MENA countries current account deficit? A panel logit approach analysis [¿Cuáles son los principales factores que impulsan el déficit de cuenta corrient," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 33(1), pages 134-153, June.
    3. Guneren Genc, Elif & Deniz Basar, Ozlem, 2019. "Comparison of Country Ratings of Credit Rating Agencies with MOORA Method," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 10(2), pages 391-404, April.
    4. Oliver Takawira & John W. Muteba Mwamba, 2020. "Determinants of Sovereign Credit Ratings: An Application of the Naïve Bayes Classifier," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 8(4), pages 279-299.

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    More about this item

    Keywords

    Sovereign Rating; Emerging Countries; Ordered Probit and Logit Panel Data Analysis;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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