Estimating OECD Country Risk from Capital Stock: An Exploratory Inductive Approach Based on Bootstrap and Other Techniques

Francisco Rabadán Peréz () and María Victoria Ramírez-Muñoz ()
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Francisco Rabadán Peréz: URJC - Universidad Rey Juan Carlos = Rey Juan Carlos University
María Victoria Ramírez-Muñoz: UCO - Université Catholique de l'Ouest, UA - Université d'Angers, GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement, EGEI - Éthique et Gouvernance de l’Entreprise et des Institutions - UCO - Université Catholique de l'Ouest

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Abstract: This study analyzes the Organization for Economic Co-operation and Development (OECD) country risk index from an innovative perspective, focusing on social capital variables as predictors with the assumption that trust and social cohesion influence economic and geopolitical stability. The dataset used is a reduced version of the World Values Survey (WVS), wave 7, combined with variables used by the OECD for calculating Country Risk (CR). The OECD's methodology for estimating this index combines both quantitative and qualitative methods and faces two main challenges: (1) the number of initial variables (155) exceeds the number of available cases (39), and (2) the countries surveyed were assessed over different time periods (2017-2020). To address these issues, the study assumes that social capital variables impact country risk regardless of the timeline of data collection. The analysis is conducted in several methodological stages. In the first stage, a simple random sampling of 1,000 is employed to identify the most relevant predictor variables. In the subsequent stages, the model is estimated using Bootstrap with the original data, incorporating GDP growth as a control variable. The results include a comparison between the model estimates and the actual observations of the OECD country risk index, revealing that the most significant deviations occur in countries with high levels of political risk and conflicts. This research enhances the understanding of the economic implications of intangible factors such as trust and social cohesion, providing a foundation for developing theoretically grounded predictive models of the country risk index in the OECD context.

Keywords: Social capital; Country risk; OECD; Bootstrap estimation (search for similar items in EconPapers)
Date: 2025-05-29
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Published in GEOPOLITICAL AND NEO-MERCANTILISt CHALLENGES to THE WORLD ECONOMY, World economy society; XXV World Economy Meeting, May 2025, Madrid, Spain

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05131064

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