The nexus between country risk and exchange rate regimes: A global investigation

Liu, Jie; Wei, Wei; Shi, Yaobo; Chang, Chun‐Ping

doi:10.1016/j.najef.2018.08.025

Cited by 11 publications

(6 citation statements)

References 39 publications

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“…They have more preferences to manage the national economy and more likely to use an expansionary macroeconomic policy but less likely to adopt a fixed exchange rate regime. This result is confirmed by the partisan theory initiated by Hibbs (1977) and extended by Alesina (1988), Berdiev et al (2012) and Liu et al (2020). As for the effect of political risk, it turns out to be negative, which reveals that in a situation of political uncertainty the probability of maintaining a fixed exchange rate regime is less preferable.…”

Section: Fixedsupporting

confidence: 57%

How Economic, Political and Institutional Factors Influence the Choice of Exchange Rate Regimes? New Evidence from Selected Countries of the MENA Region

et al. 2022

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Section: Fixedsupporting

confidence: 57%

How Economic, Political and Institutional Factors Influence the Choice of Exchange Rate Regimes? New Evidence from Selected Countries of the MENA Region

et al. 2022

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“…Bouraoui and Hammami (2017) consider the role of political instability on the FX rates. Liu et al (2020) examine the nexus between country risk and exchange rate regimes. Moreover, there are some studies, like Demir (2009), Topak and Muzir (2011), Kartal (2020), Münyas (2020), andYıldırım (2020), that examine the nexus between the FX rates and country risk, including CDS spreads, country risk premium, and sub-components of the country risk for countries including Turkey.…”

Section: Introductionmentioning

confidence: 99%

Time and Frequency Dependency of Foreign Exchange Rates and Country Risk: Evidence From Turkey

Kırıkkaleli

Kartal

Adebayo

2022

BEMP

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This study examines the time and frequency dependency nexus between foreign exchange (FX) rates and country risk in Turkey. We considered Turkey because it is a negative outlier country in terms of the progress of these indicators. Using quarterly data from 1990/Q1 to 2018/Q4 and the Wavelet Coherence approach, we find that an increase in the country risk causes an increase in the FX rates at different frequencies, especially in the medium and long term and different periods. The results highlight the significance of country risk for the progress of the FX rates. Policy implications are discussed.

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“…Country risk assessment provides valuable information to decision‐makers associated with developing policies at the national level and making key strategic decisions concerning international businesses. Due to the strategic nature of such decisions, several studies have focused on establishing drivers and consequences of country risk (Cavusgil et al., 2020; Chiu & Lee, 2019; Deligonul, 2020; Liu et al., 2020; Shostya & Banai, 2017). Country risk is generally conceptualized as a composite index of economic risk, political risk, and financial system risk, which are further contingent on numerous factors such as regional stability, business environment, social stability, monetary policy, fiscal policy, and others.…”

Section: Discussionmentioning

confidence: 99%

“…Political instability and ineffective government policies are considered as the main drivers of reduced investments in a country. The realization of political risk leads to an economic recession and unavoidable financial crises (Liu, Wei, Shi, & Chang, 2020).…”

Section: Country Riskmentioning

confidence: 99%

Exploring Probabilistic Network‐Based Modeling of Multidimensional Factors Associated with Country Risk

Qazi

Khan

2020

Risk Analysis

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Assessment of country risk provides a vital source of information to organizations for expanding and globalizing their operations. Various rating agencies are involved in developing models for assessing country risk, which utilize different statistical techniques for establishing the overall impact of individual factors on country risk. The main limitation of existing studies on country risk is their limited focus on exploring the relative contribution of individual factors to country risk in a probabilistic network setting. Utilizing real data, we develop a probabilistic network model that captures dependencies among multidimensional factors associated with country risk. Further, we assess the network‐wide vulnerability and resilience potential of individual factors to identify critical factors. The findings of this study provide policy‐makers with some unique insights into prioritizing strategies to mitigate country risk. Further, this study provides the context for multinational enterprises to utilize the proposed methodology for prioritizing key factors associated with the relative variables of interest such as regional stability and business environment among others.

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The nexus between country risk and exchange rate regimes: A global investigation

Cited by 11 publications

References 39 publications

How Economic, Political and Institutional Factors Influence the Choice of Exchange Rate Regimes? New Evidence from Selected Countries of the MENA Region

How Economic, Political and Institutional Factors Influence the Choice of Exchange Rate Regimes? New Evidence from Selected Countries of the MENA Region

Time and Frequency Dependency of Foreign Exchange Rates and Country Risk: Evidence From Turkey

Exploring Probabilistic Network‐Based Modeling of Multidimensional Factors Associated with Country Risk

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