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The Link Between Adherence to International Standards of Good Practice, Foreign Exchange Spreads, and Ratings

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  • Andrew Tiffin
  • Christian B. Mulder
  • Charalambos Christofides
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    Abstract

    This paper examines the relationship between adherence to international standards of good practice in policy-making and two key indicators of access to capital markets and the cost of this access: spreads and sovereign ratings. In contrast to other work, this study reviews a broad set of indicators for adherence to international standards. The estimations are conducted for emerging market economies, and pay particular attention to issues of persistence in spreads and ratings and nonlinearities in the relationships. The main finding confirms the expectation that standards are indeed relevant. Accounting standards and property rights are especially important for spreads, in addition to data transparency (SDDS subscription). Accounting standards and corruption are especially important in explaining ratings in addition to trade protectiveness (not a standard).

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/74.

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    Length: 31
    Date of creation: 01 Apr 2003
    Date of revision:
    Handle: RePEc:imf:imfwpa:03/74

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    Related research

    Keywords: Emerging markets; Economic models; standards; correlation; regulation; international standards; equation; standards and codes; regulations; autocorrelation; statistics; econometrics; probability; dummy variable; equations; standard deviation; mean group; absolute error; standard errors; instrumental variables; statistical significance; international accounting standards; standard error; correlations; independent variable; international accounting standards committee; explanatory power; causation; nonlinearity; mean group estimation; survey; estimation procedure; instrumental variable; covariance; empirical specification; coefficient vector; estimation method; outliers; dynamic models;

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    Cited by:
    1. Maltritz, Dominik & Molchanov, Alexander, 2014. "Country credit risk determinants with model uncertainty," International Review of Economics & Finance, Elsevier, vol. 29(C), pages 224-234.
    2. Stanley Watt & Donal McGettigan & Saade Chami, 2007. "Jordan's International Reserve Position," IMF Working Papers 07/103, International Monetary Fund.
    3. John Cady & Anthony J. Pellechio, 2006. "Sovereign Borrowing Cost and the IMF's Data Standards Initiatives," IMF Working Papers 06/78, International Monetary Fund.

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