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Financial Distress and Access to Capital in Emerging Markets

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  • Jorge Guillen

Abstract

In this paper I study the main determinants of successful reaccess to international capital markets on a set of emerging market countries after a financial crisis. I focus on three components of the reaccess strategy: commitment to pay, ability to pay, and global liquidity. I employ a panel of 49 countries over a nearly 30-year period and apply a simple probit approach to show that, indeed, a sound external position and a sustainable debt profile, accompanied by a favorable global liquidity environment, are the key considerations for creditors considering whether to resume lending.

Suggested Citation

  • Jorge Guillen, 2010. "Financial Distress and Access to Capital in Emerging Markets," Prague Economic Papers, Prague University of Economics and Business, vol. 2010(1), pages 5-20.
    • Handle: RePEc:prg:jnlpep:v:2010:y:2010:i:1:id:361:p:5-20
    DOI: 10.18267/j.pep.361
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    1. 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.
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    8. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross‐Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
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    Cited by:

    1. Alenka Kavkler & Mejra Festić, 2011. "Modelling Stock Exchange Index Returns in Different GDP Growth Regimes," Prague Economic Papers, Prague University of Economics and Business, vol. 2011(1), pages 3-22.
    2. Piotr Krajewski & Michał Mackiewicz & Agata Szymańska, 2016. "Fiscal Sustainability in Central and Eastern European Countries - A Post-Crisis Assessment," Prague Economic Papers, Prague University of Economics and Business, vol. 2016(2), pages 175-188.

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    More about this item

    Keywords

    developing countries; sovereign debt; reaccess; international finance;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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