The Importance of Sovereign Rating for Romania in the Crisis Context

Dudian Monica () and Trasca Daniela Livia ()
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Dudian Monica: Academy of Economic Studies, Bucharest
Trasca Daniela Livia: Academy of Economic Studies, Bucharest

Ovidius University Annals, Economic Sciences Series, 2011, vol. XI, issue 1, 680-687

Abstract: The sovereign credit risk rating for Romania had significant changes in the 1996 – 2008 periods, from category B- with negative perspective, as the lowest level, to BBB-, with positive perspective. The objective of this paper is to explain the importance of sovereign rating for Romania in the crisis context. The first part of the article is a short presentation of the sovereign rating literature regarding the concept and the risk sources. The second part highlights the relation between foreign currency long-term sovereign rating, foreign direct investment and debt cost. The paper find evidence that sovereign rating influences capital inflows and debt cost.

Keywords: sovereign rating; rating agencies; foreign direct investment; credit spreads (search for similar items in EconPapers)
JEL-codes: G24 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:11:y:2011:i:1:p:680-687

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