The Determinants of the Sovereign Debt Rating: Evidence for the European Union Countries

Emilian C. Miricescu (), Lucian Tatu and Delia Cornea ()
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Emilian C. Miricescu: The Bucharest University of Economic Studies and CEFIMO
Delia Cornea: European Business School Paris

ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, 2016, vol. 50, issue 1, 175-188

Abstract: The paper aims at identifying the determinants of the sovereign rating for a panel comprising of 25 European Union countries over the period 2005-2012. We found that short run variation in inflation, unemployment, public debt to GDP ratio, real growth rate, GDP per capita and control of corruption are robust determinants of sovereign debt rating. We also showed that key socioeconomic and political indicators of sovereign credit risk vary with differences in countries’ development. In addition, a series of indicators such as real GDP growth rate and public debt to GDP ratio seems to act differently during the postcrisis period.

Keywords: sovereign debt; rating agencies; economic development; fiscal stabilization; European Union. (search for similar items in EconPapers)
JEL-codes: F34 G15 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:cys:ecocyb:v:50:y:2016:i:1:p:175-188

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