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The Importance of Sovereign Rating for Romania in the Crisis Context

Author

Listed:
  • Dudian Monica

    () (Academy of Economic Studies, Bucharest)

  • Trasca Daniela Livia

    () (Academy of Economic Studies, Bucharest)

Abstract

The sovereign credit risk rating for Romania had significant changes in the 1996 – 2008 periods, from category B- with negative perspective, as the lowest level, to BBB-, with positive perspective. The objective of this paper is to explain the importance of sovereign rating for Romania in the crisis context. The first part of the article is a short presentation of the sovereign rating literature regarding the concept and the risk sources. The second part highlights the relation between foreign currency long-term sovereign rating, foreign direct investment and debt cost. The paper find evidence that sovereign rating influences capital inflows and debt cost.

Suggested Citation

  • Dudian Monica & Trasca Daniela Livia, 2011. "The Importance of Sovereign Rating for Romania in the Crisis Context," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 680-687, May.
  • Handle: RePEc:ovi:oviste:v:11:y:2011:i:1:p:680-687
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    File URL: http://stec.univ-ovidius.ro/html/anale/RO/cuprins%20rezumate/rezumate2011p1.pdf
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    More about this item

    Keywords

    sovereign rating; rating agencies; foreign direct investment; credit spreads;

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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