2015
DOI: 10.2139/ssrn.2625090
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The Home Bias in Sovereign Ratings

Abstract: Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in… Show more

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Cited by 21 publications
(37 citation statements)
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References 66 publications
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“…A sovereign's creditworthiness as measured by credit ratings is most strongly influenced by the country's economic and political fundamentals. In the empirical literature on the determinants of credit ratings, gross domestic product (GDP) per capita, GDP growth, inflation, and external debt are found to be robust predictors (Afonso 2003;Cantor and Packer 1996;Fuchs and Gehring 2017;Hill, Brooks, and Faff 2010). Several political indicators like the political regime type, partisanship, and the rule of law have also been found to correlate with rating outcomes (Archer, Biglaiser, and DeRouen 2007).…”
Section: Adjustment Effectsmentioning
confidence: 99%
See 2 more Smart Citations
“…A sovereign's creditworthiness as measured by credit ratings is most strongly influenced by the country's economic and political fundamentals. In the empirical literature on the determinants of credit ratings, gross domestic product (GDP) per capita, GDP growth, inflation, and external debt are found to be robust predictors (Afonso 2003;Cantor and Packer 1996;Fuchs and Gehring 2017;Hill, Brooks, and Faff 2010). Several political indicators like the political regime type, partisanship, and the rule of law have also been found to correlate with rating outcomes (Archer, Biglaiser, and DeRouen 2007).…”
Section: Adjustment Effectsmentioning
confidence: 99%
“…Sovereign credit ratings, as assessments of a future default probability, are based not only on information about a country's current economic and political performance, but also on expectations of the country's future development (Fuchs and Gehring 2017). As economic indicators, like GDP and inflation are imperfect and noisy measures, it is rational for investors and rating agencies to use other signals to infer information and adapt their assessment.…”
Section: Signaling Effectsmentioning
confidence: 99%
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“…Arguably, democracy is a concept that is unusually difficult to measure. Yet it is essential to many contemporary research questions in IR and security studies, including about the (Fuchs, Gehring, and McDowell 2016;Fuchs and Gehring 2017). Once again, it makes sense for scholars seeking to understand how investors evaluate countries' creditworthiness to rely on the actual credit ratings produced by private agencies that are used by the investors of interest (e.g., Fitch, Moody's, and Standard and Poor's) as well as the more subjective indicators that the investors in question are known to value.…”
Section: Extending the Argument To Other Research Questionsmentioning
confidence: 99%
“…us from performing such an exercise. Another strategy is used by Fuchs and Gehring (2017). The paper first documents that rating agencies more favorably rate the sovereign bonds of their home countries.…”
Section: Introductionmentioning
confidence: 99%