publication . Article . 1993

Relative Importance of Political Instability and Economic Variables on Perceived Country Creditworthiness

Suk Hun Lee;
Open Access
  • Published: 01 Jan 1993 Journal: Journal of International Business Studies, volume 24, pages 801-812 (issn: 0047-2506, eissn: 1478-6990, Copyright policy)
  • Publisher: Springer Science and Business Media LLC
Abstract
This paper examines the relative importance of political instability and economic variables on perceived country creditworthiness. Our results indicate that both political instability and economic variables are taken into account in evaluating country creditworthiness; however, it appears that bankers assign larger weight to economic variables. Hence, it seems that the country creditworthiness perceptions are largely based on a country's economic performances, which we except to reflect longer term political stability. In addition, the frequency of changes in the regime and armed conflict, both proxying for political instability, also affect the credit ratings.
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Subjects
free text keywords: Management of Technology and Innovation, Strategy and Management, Economics and Econometrics, General Business, Management and Accounting, Business and International Management, Political instability, Credit rating, Armed conflict, International business, Political stability, International political economy, American political science, Monetary economics, Economics, Market economy, Organizational culture
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