FOOL THE MARKETS? CREATIVE ACCOUNTING, FISCAL TRANSPARENCY AND SOVEREIGN RISK PREMIA
Kerstin Bernoth () and
Guntram Wolff
Scottish Journal of Political Economy, 2008, vol. 55, issue 4, 465-487
Abstract:
We investigate the effects of official fiscal data and creative accounting signals on interest rate spreads between bond yields in the European Union. We find that two different measures of creative accounting indeed both increase the spread. The increase of the risk premium is stronger, if financial markets are unsure about the true extent of creative accounting. Moreover, fiscal transparency reduces risk premia. Instrumental variable regressions confirm these results by addressing potential reverse causality problems and measurement bias.
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (65)
Downloads: (external link)
https://doi.org/10.1111/j.1467-9485.2008.00462.x
Related works:
Working Paper: FOOL THE MARKETS? CREATIVE ACCOUNTING, FISCAL TRANSPARENCY AND SOVEREIGN RISK PREMIA (2008)
Working Paper: Fool the Markets? Creative Accounting, Fiscal Transparency and Sovereign Risk Premia (2006) 
Working Paper: Fool the markets? Creative accounting, fiscal transparency and sovereign risk premia (2006) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:55:y:2008:i:4:p:465-487
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0036-9292
Access Statistics for this article
Scottish Journal of Political Economy is currently edited by Tim Barmby, Andrew Hughes-Hallett and Campbell Leith
More articles in Scottish Journal of Political Economy from Scottish Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().