Sovereign debt defaults

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dc.contributor.author Zeaiter, Hussein
dc.date.accessioned 2016-05-13T12:36:04Z
dc.date.available 2016-05-13T12:36:04Z
dc.date.copyright 2015 en_US
dc.date.issued 2017-10-12
dc.identifier.issn 1226-4261 en_US
dc.identifier.uri http://hdl.handle.net/10725/3777 en_US
dc.description.abstract This study investigates the determinants of sovereign default risk in 123 developing countries over the period 1970-2012. Adopting an approach distinct from the literature, this paper employs a continuous measure of the accumulated arrears of interest payments and principal repayments on private and official external debt as a proxy for sovereign default. Apart from the importance of the current account balance, short-term debt, credit to the private sector, output, lending interest rate, and the exchange rate, empirical results show that the presence of the HIPC relief program is found to mask a portion of the true effects of the economic and political factors on debt arrears. In addition, in contrast to middle-income countries, political risk exhibits a negative impact on accumulated arrears in low-income countries. Arrears are found to be responsive to lending interest rate only in the middle-income and nonHIPC countries. Moreover, in the HIPC and low-income countries arrears are found to be more sensitive to volatility in the exchange rates. This study recommends that indebted countries: (1) stabilize their exchange rate, (2) rationally manage external debt, and (3) enhance transparency in governmental institutions. en_US
dc.language.iso en en_US
dc.title Sovereign debt defaults en_US
dc.type Article en_US
dc.description.version Published en_US
dc.title.subtitle Evidence from developing countries en_US
dc.author.school SOB en_US
dc.author.idnumber 199704790 en_US
dc.author.department Department of Economics (ECON) en_US
dc.description.embargo N/A en_US
dc.relation.journal Journal of economic research en_US
dc.journal.volume 20 en_US
dc.journal.issue 2 en_US
dc.article.pages 199-229 en_US
dc.identifier.ctation Zeaiter, H. (2015). Sovereign debt defaults en_US
dc.author.email hussein.zeaiter@lau.edu.lb en_US
dc.identifier.tou http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php en_US
dc.identifier.url https://dialnet.unirioja.es/servlet/articulo?codigo=5174626 en_US

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