Sovereign Debt Crises and Credit to the Private Sector

Carlos Arteta () and Galina Hale

No 2006-21, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: We use micro–level data to analyze emerging markets’ private sector access to international debt markets during sovereign debt crises. Using fixed effect analysis, we find that these crises are systematically accompanied by a decline in foreign credit domestic private firms, both during debt renegotiations and for over two years after the restructuring agreements are reached. This decline is large (over 20 percent), statistically significant, and robust when we control for a host of fundamentals. We find that this effect is concentrated in the non-financial sector and is different for exporters and for firms in the non–exporting sector. We also find that the magnitude of the effect depends on the type of debt restructuring agreement.

Keywords: Debts, External; Financial crises (search for similar items in EconPapers)
JEL-codes: F32 F34 G32 (search for similar items in EconPapers)
Pages: 51
Date: 2006-12-01
New Economics Papers: this item is included in nep-ban and nep-fmk
Note: PDF date: December 15, 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Related works:
Journal Article: Sovereign debt crises and credit to the private sector (2008)
Working Paper: Sovereign debt crises and credit to the private sector (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:2006-21

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DOI: 10.24148/wp2006-21

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