WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 13, 2016
Influence of World Governance Indicators on the Determination of Sovereign Ratings in Latin American Countries
Authors: , , , ,
Abstract: The credit risk of governments worldwide has been evaluated by expert international agencies that disclose their ratings. However, the weightings of the variables that determine these ratings are still not as transparent as they should be. This study has the purpose of assessing the influence of worldwide governance indicator measures on the determination of long-term sovereign credit ratings in Latin American countries, using ordinal regression as the analytical tool. The results of this study show that the government effectiveness and regulation quality are two of the factors that can influence the perception of sovereign risk. The contributions of this study include the expansion of knowledge on this subject and the search for empirical evidence regarding the determination of ratings. Information regarding the effects of governance indicators on the determination of sovereign risk can be useful for researchers, governments, and agents of the financial market, aiding them in decision making and risk management.
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Pages: 216-228
WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 13, 2016, Art. #21