Quid pro quo? Political ties and sovereign borrowing
Gene Ambrocio and
Iftekhar Hasan ()
Journal of International Economics, 2021, vol. 133, issue C
Do stronger political ties with a global superpower improve sovereign borrowing conditions? We use data on voting at the United Nations General Assembly along with foreign aid flows to construct an index of political ties and find evidence that suggests stronger political ties with the US is associated with both better sovereign credit ratings and lower yields on sovereign bonds especially among lower income countries. We use official heads-of-state visits to the White House and coalition forces troop contributions as additional measures of the strength of political ties to further reinforce our findings.
Keywords: Sovereign debt; International relations; Foreign aid; United Nations (search for similar items in EconPapers)
JEL-codes: F34 F35 F50 G24 H63 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:133:y:2021:i:c:s0022199621001033
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