Boon or Burden? The Effect of Private Sector Debt on the Risk of Sovereign Default in Developing Countries
AbstractWe explore how the share of the private sector in total external debt affects perceived creditworthiness and the likelihood of sovereign default in developing countries. While there are theoretical arguments both in favor and against a stabilizing role of private-sector borrowing, the evidence clearly supports the notion that a greater share of the private sector in total external debt is associated with a reduced likelihood of sovereign default. --
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Bibliographic InfoPaper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Zurich 2008 with number 16.
Date of creation: 2008
Date of revision:
International Investment; Sovereign Risk;
Other versions of this item:
- Oya Celasun & Philipp Harms, 2011. "Boon Or Burden? The Effect Of Private Sector Debt On The Risk Of Sovereign Default In Developing Countries," Economic Inquiry, Western Economic Association International, vol. 49(1), pages 70-88, 01.
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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