The logics of sovereign credit ratings in developed and developing countries

Sebastian Wüste

Research in International Business and Finance, 2022, vol. 62, issue C

Abstract: This article analyzes empirically the different determinants of Standard & Poor’s, Moody’s and Fitch ratings in developed and developing countries. It finds that the determinants of the ratings follow different patterns in both groups of countries. Whereas credit rating agencies regard openness to trade as negative for developed countries, they do not for developing countries. Whereas gross debt stock and the age structure of the society are significant predictors for credit ratings in developing countries, developed countries profit from a low unemployment rate, a long tenure of the chief executive and strong fiscal rules, more specifically from strong balanced-budget and expenditure rules.

Keywords: Sovereign credit ratings; Fiscal rules; Developing countries; Trade openness (search for similar items in EconPapers)
JEL-codes: F34 G24 G28 H61 O23 O57 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:62:y:2022:i:c:s0275531922001052

DOI: 10.1016/j.ribaf.2022.101717

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