The Economic Content of Indicators of Developing Country Creditworthiness

Nadeem Ul Haque, Manmohan S. Kumar, Nelson Mark and Donald J. Mathieson
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Nadeem Ul Haque: International Monetary Fund
Manmohan S. Kumar: International Monetary Fund
Donald J. Mathieson: International Monetary Fund

IMF Staff Papers, 1996, vol. 43, issue 4, 688-724

Abstract: This paper analyzes the economic determinants of developing country creditworthiness indicators for over 60 developing countries for the period from 1980 to 1993. Our results indicate that economic fundamentals--the ratio of nongold foreign exchange reserves to imports, the ratio of the current account balance to GDP, growth, and inflation--explain a large amount of the variation in the credit ratings. All developing country ratings were adversely affected by increases in international interest rates, independent of the domestic economic fundamentals. A country's regional location and the structure of its exports (such as whether it is primarily an exporter of fuel products or manufactured products) were also important.

JEL-codes: G15 G24 P52 (search for similar items in EconPapers)
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pal:imfstp:v:43:y:1996:i:4:p:688-724

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