IDEAS home Printed from https://ideas.repec.org/a/mcb/jmoncb/v22y1990i3p357-69.html
   My bibliography  Save this article

Politics and Perceived Country Creditworthiness in International Banking

Author

Listed:
  • Brewer, Thomas L
  • Rivoli, Pietra

Abstract

This paper marks a departure from most previous studies of country creditworthiness in international banking because it incorporates systematically generated quantitative indicators of political instability in the analysis. The authors empirically test for the effects of political instability on perceived country creditworthiness using data on thirty heavily indebted developing countries for the period 1967-86. In addition to economic factors, they examine the effects of three types of political instability--regime change, political legitimacy, and armed conflict. The authors also distinguish between proximate instability and chronic instability. They find significant effects of proximate instability--particularly in governmental regime--on indicators of countries' perceived creditworthiness. Copyright 1990 by Ohio State University Press.

Suggested Citation

  • Brewer, Thomas L & Rivoli, Pietra, 1990. "Politics and Perceived Country Creditworthiness in International Banking," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(3), pages 357-369, August.
  • Handle: RePEc:mcb:jmoncb:v:22:y:1990:i:3:p:357-69
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-2879%28199008%2922%3A3%3C357%3APAPCCI%3E2.0.CO%3B2-V&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Olivier Jean Blanchard & Peter Diamond, 1994. "Ranking, Unemployment Duration, and Wages," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 417-434.
    2. Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
    3. Dickens, William T, et al, 1989. "Employee Crime and the Monitoring Puzzle," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 331-347, July.
    4. Peter A. Diamond, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 217-227.
    5. repec:fth:harver:1515 is not listed on IDEAS
    6. Louis N. Christofides & Andrew J. Oswald, 1992. "Real Wage Determination and Rent-Sharing in Collective Bargaining Agreements," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 985-1002.
    7. Olivier Jean Blanchard & Peter A. Diamond, 1989. "The Aggregate Matching Function," NBER Working Papers 3175, National Bureau of Economic Research, Inc.
    8. Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
    9. Nickell, Stephen J, 1990. "Unemployment: A Survey," Economic Journal, Royal Economic Society, vol. 100(401), pages 391-439, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Demir, Firat, 2006. "Volatility of short term capital flows and socio-political instability in Argentina, Mexico and Turkey," MPRA Paper 1943, University Library of Munich, Germany.
    2. Sara Bertin & Steve Ohana & Vanessa Strauss-Kahn, 2016. "Revisiting the Link Between Political and Financial Crises in Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 25(3), pages 323-366.
    3. Patricia Crifo & Marc-Arthur Diaye & Rim Oueghlissi, 2014. "Measuring the effect of government ESG performance on sovereign borrowing cost," CIRANO Working Papers 2014s-37, CIRANO.
    4. Emmanuelle Auriol & Pierre M. Picard, 2008. "Infrastructure and Public Utilities Privatization in Developing Countries," World Bank Economic Review, World Bank Group, vol. 23(1), pages 77-100, November.
    5. Huseyin Ozturk & Ersin Namli & Halil Ibrahim Erdal, 2016. "Reducing Overreliance on Sovereign Credit Ratings: Which Model Serves Better?," Computational Economics, Springer;Society for Computational Economics, vol. 48(1), pages 59-81, June.
    6. Narjess Boubakri & Jean-Claude Cosset & Houcem Smaoui, 2011. "Political Institutions and Sovereign Credit Spreads," Working Papers 647, Economic Research Forum, revised 12 Jan 2011.
    7. Rasha Alsakka & Owain ap Gwilym, 2010. "Sovereign Ratings and Migrations: Emerging Markets," Working Papers 10009, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    8. Gelos, R. Gaston & Sahay, Ratna & Sandleris, Guido, 2011. "Sovereign borrowing by developing countries: What determines market access?," Journal of International Economics, Elsevier, vol. 83(2), pages 243-254, March.
    9. Derya Gültekin-Karakaş & Mehtap Hisarcıklılar & Hüseyin Öztürk, 2011. "Sovereign Risk Ratings: Biased Toward Developed Countries?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 69-87, May.
    10. Cuadra, Gabriel & Sapriza, Horacio, 2008. "Sovereign default, interest rates and political uncertainty in emerging markets," Journal of International Economics, Elsevier, pages 78-88.
    11. Hashmi, Rimsha Karim & Qayyum, Abdul, 2016. "Estimating the Long-Run Creditworthiness of Pakistan," MPRA Paper 70529, University Library of Munich, Germany.
    12. El-Shagi, Makram & von Schweinitz, Gregor, 2017. "Why they keep missing: An empirical investigation of rational inattention of rating agencies," IWH Discussion Papers 1/2017, Halle Institute for Economic Research (IWH).
    13. Janine Aron, 2003. "Building institutions in post-conflict African economies," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(4), pages 471-485.
    14. Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian T. & Siegel, Stephan, 2016. "Political risk and international valuation," Journal of Corporate Finance, Elsevier, vol. 37(C), pages 1-23.
    15. Oral, Muhittin, 2010. "E-DEA: Enhanced data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 207(2), pages 916-926, December.
    16. Nath, Hiranya K., 2009. "Country Risk Analysis: A Survey of the Quantitative Methods," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 62(1), pages 69-94.
    17. Morales, Jorge & Tuesta, Pedro, 1998. "Calificaciones de crédito y riesgo país," Revista Estudios Económicos, Banco Central de Reserva del Perú, issue 3.
    18. Iordanis Eleftheriadis & Vasilios Vyttas, 2016. "Creating a culture of risk in the Greek public administration. A brief retrospect on the memorandum era," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 9(2), pages 65-71, June.
    19. Juan Carlos Hatchondo & Leonardo Martinez, 2010. "The politics of sovereign defaults," Economic Quarterly, Federal Reserve Bank of Richmond, issue 3Q, pages 291-317.
    20. Berger, Allen N. & El Ghoul, Sadok & Guedhami , Omrane & Roman, Raluca, 2015. "Internationalization and bank risk," Research Working Paper RWP 15-8, Federal Reserve Bank of Kansas City.
    21. David McKenzie, 2001. "An Econometric analysis of IBRD creditworthiness," International Economic Journal, Taylor & Francis Journals, vol. 18(4), pages 427-448.
    22. Rivoli, Pietra & Brewer, Thomas L., 1997. "Political instability and country risk," Global Finance Journal, Elsevier, vol. 8(2), pages 309-321.
    23. Derya Gültekin-Karakaş & Mehtap Hisarcıklılar & Hüseyin Öztürk, 2011. "Sovereign Risk Ratings: Biased Toward Developed Countries?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 69-87, May.
    24. Aron, Janine, 2000. "Growth and Institutions: A Review of the Evidence," World Bank Research Observer, World Bank Group, vol. 15(1), pages 99-135, February.
    25. Islam, Roumeen & Montenegro, Claudio E., 2002. "What determines the quality of institutions?," Policy Research Working Paper Series 2764, The World Bank.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:22:y:1990:i:3:p:357-69. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.