International Bank Flows to Emerging Markets: Influence of Sovereign Credit Ratings and Their Regional Spillover Effects

Suk-Joong Kim () and Eliza Wu

Chapter 14 in Information Spillovers and Market Integration in International Finance:Empirical Analyses, 2018, pp 467-515 from World Scientific Publishing Co. Pte. Ltd.

Abstract: We examine whether changes in sovereign credit assessments help to determine international bank flows to emerging countries. We focus on the banking flows of G7 countries to a sample of 55 emerging market borrowers for 1995–2008. We find evidence indicating that sovereign credit rating revisions have significant and positive influences on international bank flows from developed markets even after controlling for other determinants. In addition, we find strong regional rating spillover effects. Ratings improvements in one emerging market region tends to reduce bank flows to the other regions. However, there is an exception from the Asia Pacific to Eastern Europe.

Keywords: Currency Intervention; Macroeconomic News; International Capital Flows; Sovereign Credit Rating (search for similar items in EconPapers)
JEL-codes: F30 (search for similar items in EconPapers)
Date: 2018
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Journal Article: INTERNATIONAL BANK FLOWS TO EMERGING MARKETS: INFLUENCE OF SOVEREIGN CREDIT RATINGS AND THEIR REGIONAL SPILLOVER EFFECTS (2011)
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