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The Economic Content of Indicators of Developing Country Creditworthiness

Author

Listed:
  • Nadeem Ul Haque

    (International Monetary Fund)

  • Manmohan S. Kumar

    (International Monetary Fund)

  • Nelson Mark

    (International Monetary Fund)

  • Donald J. Mathieson

    (International Monetary Fund)

Abstract

This paper analyzes the economic determinants of developing country creditworthiness indicators for over 60 developing countries for the period from 1980 to 1993. Our results indicate that economic fundamentals--the ratio of nongold foreign exchange reserves to imports, the ratio of the current account balance to GDP, growth, and inflation--explain a large amount of the variation in the credit ratings. All developing country ratings were adversely affected by increases in international interest rates, independent of the domestic economic fundamentals. A country's regional location and the structure of its exports (such as whether it is primarily an exporter of fuel products or manufactured products) were also important.

Suggested Citation

  • Nadeem Ul Haque & Manmohan S. Kumar & Nelson Mark & Donald J. Mathieson, 1996. "The Economic Content of Indicators of Developing Country Creditworthiness," IMF Staff Papers, Palgrave Macmillan, vol. 43(4), pages 688-724, December.
    • Handle: RePEc:pal:imfstp:v:43:y:1996:i:4:p:688-724
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    More about this item

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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