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The Link Between Adherence to International Standards of Good Practice, Foreign Exchange Spreads, and Ratings

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  • Andrew J Tiffin
  • Christian B. Mulder
  • Charalambos Christofides

Abstract

This paper examines the relationship between adherence to international standards of good practice in policy-making and two key indicators of access to capital markets and the cost of this access: spreads and sovereign ratings. In contrast to other work, this study reviews a broad set of indicators for adherence to international standards. The estimations are conducted for emerging market economies, and pay particular attention to issues of persistence in spreads and ratings and nonlinearities in the relationships. The main finding confirms the expectation that standards are indeed relevant. Accounting standards and property rights are especially important for spreads, in addition to data transparency (SDDS subscription). Accounting standards and corruption are especially important in explaining ratings in addition to trade protectiveness (not a standard).

Suggested Citation

  • Andrew J Tiffin & Christian B. Mulder & Charalambos Christofides, 2003. "The Link Between Adherence to International Standards of Good Practice, Foreign Exchange Spreads, and Ratings," IMF Working Papers 03/74, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:03/74
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    Cited by:

    1. Yuko Hashimoto & K. M. Wacker, 2016. "The role of information for international capital flows: new evidence from the SDDS," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(3), pages 529-557, August.
    2. John Cady & Anthony J. Pellechio, 2006. "Sovereign Borrowing Cost and the IMF’s Data Standards Initiatives," IMF Working Papers 06/78, International Monetary Fund.
    3. Stanley B Watt & Donal McGettigan & Saade Chami, 2007. "Jordan’s International Reserve Position; Justifiably Strong," IMF Working Papers 07/103, International Monetary Fund.
    4. Yves M. Tehou TEKENG & Mesbah Fathy SHARAF, 2015. "Fiscal Transparency, Measurement and Determinants: Evidence from 27 Developing Countries," Journal of Economics and Political Economy, KSP Journals, vol. 2(1), pages 69-91, March.
    5. Maltritz, Dominik & Molchanov, Alexander, 2014. "Country credit risk determinants with model uncertainty," International Review of Economics & Finance, Elsevier, vol. 29(C), pages 224-234.

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