Sovereign risk ratings: Biased toward developed countries?

Derya Gültekin-Karakaş, Mehtap Hisarciklilar, Hüseyin Öztürk

Research output: Contribution to journalArticle

25 Citations (Scopus)
37 Downloads (Pure)

Abstract

Sovereign credit ratings are widely used measurements for "country risk" in international capital markets. However, they have been exposed to increasing criticism in the aftermath of the recent global financial crises. Many international authorities proposed new frameworks for the regulation and supervision of the credit rating sector, in which many countries have taken various steps in this respect. Yet the reliability of sovereign credit ratings has not been criticized in the literature. Using random effects ordered probit modeling, this study explores the reliability of credit ratings. Separate analyses of developed and developing countries suggest that the consistency of credit ratings differs by favoring the developed country group.

Original languageEnglish
Pages (from-to)69-87
Number of pages19
JournalEmerging Markets Finance and Trade
Volume47
Issue numberSUPPL. 2
DOIs
Publication statusPublished - 1 May 2011
Externally publishedYes

Bibliographical note

This is an Accepted Manuscript of an article published by Taylor & Francis in Emerging Markets Finance and Trade on 01/05/2011, available online: http://www.tandfonline.com/10.2753/REE1540-496X4703S204

Keywords

  • Credit-rating agencies
  • ordered logit
  • ordered probit
  • political risk
  • risk premium
  • sovereign rating

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Finance

Fingerprint Dive into the research topics of 'Sovereign risk ratings: Biased toward developed countries?'. Together they form a unique fingerprint.

  • Cite this