Does Macroeconomic Transparency Help Governments Be Solvent? Evidence from Recent Data

Ramzi Mallat () and Duc Khuong Nguyen
Additional contact information
Ramzi Mallat: EM Lyon Business School & University of Lyon 2, France

No 3, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: This paper investigates whether macroeconomic and data transparency standards lead to lower borrowing costs in sovereign bond markets. We essentially show that emerging market countries which subscribed to the Special Data Dissemination Standard (SDDS) experienced a significant decline in borrowing cost proxied by sovereign yield spreads on secondary markets. However, the adherence of these markets to the Code of Good Practices on Transparency in Monetary and Financial Policies caused a significant increase in the yield spreads. There is no impact of the adherence to the Code of Good Practices in Fiscal Transparency on the changes of sovereign spreads. In addition, the results suggest that a debtor country’s internal liquidity factor (measured by the total reserves to total external debt service ratio) and external liquidity conditions (measured by the yield on US longterm bond) are the most important determinants of emerging market spreads.

Keywords: Emerging markets; Transparency; Standards and Codes; International financial architecture; Sovereign debt and yield spreads (search for similar items in EconPapers)
JEL-codes: C23 E42 F34 G18 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.depocenwp.org/upload/pubs/NguyenDucKhuo ... c%20transparency.pdf (application/pdf)

Related works:
Chapter: DOES MACROECONOMIC TRANSPARENCY HELP GOVERNMENTS BE SOLVENT?: EVIDENCE FROM RECENT DATA (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dpc:wpaper:0307

Access Statistics for this paper

More papers in Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam Contact information at EDIRC.
Bibliographic data for series maintained by Doan Quang Hung ().