Uncertainty and international debt maturity

The provision of long-term financing in the transition economies

“…This may require the transformation of the dependent variable using a log-odds ratio (log (y/1 À y)). However, the coefficient estimates using the log-odds ratio are difficult to interpret in a panel setting and therefore we follow the previous literature (Demirgüç-Kunt and Maksimovic, 1999;Rodrik and Velasco, 1999;Valev, 2007) and do not perform the transformation. Furthermore, less than 1% of the predicted values from the models are outside the unit interval.…”

“…It is not clear, however, whether expansions would stimulate the demand for long-term and short-term credit in different ways. Nonetheless, we follow the literature (Demirgüç-Kunt and Maksimovic, 1999;Qian and Strahan, 2007;Valev, 2007) and include real Per Capita GDP growth during previous year in our estimations. Boyd et al (2001) and Rousseau and Wachtel (2002) argue that high inflation discourages long-term financial contracting by raising uncertainty about the real value of future nominal payments.…”

“…In the context of international lending, Valev (2007) finds that greater Output Volatility in a country leads US banks to shorten the maturity of credit to that country. The argument is that Output Volatility proxies for the short-term operational component of business risk.…”

The Structure of Sub-National Public Debt: Liquidity vs Credit Risks

“…Some empirical studies have analyzed the determination of short-term debt, mainly in emerging market economies (Mehl and Reynaud, 2010;Valev, 2006Valev, , 2007Lee et al, 2011;Borensztein et al, 2004;Rodrick and Velasco, 1999;Bussière and Mulder, 1999;Baldacci et al, 2011;Jedrzejowicz and Kozinski, 2012), some of them focusing on its role as an indicator of vulnerability to international financial crises. Increased reliance on short-term debt may make a government more vulnerable in a crisis framework, because of the need to rollover increased amounts of debt.…”

Risk Factors and the Maturity of Subnational Debt

“…Some empirical studies have looked at the role of the maturity structure of sovereign debt as an indicator of vulnerability to international financial crises, mainly for emerging market economies (Mehl and Reynaud 2010; Valev 2006, 2007; Lee, Xie, and Yau 2011; Borensztein et al 2004; Rodrick and Velasco 1999; Bussiére and Mulder 1999; Baldacci, McHugh, and Petrova 2011; Jedrzejowicz and Kozinski 2012). Increased reliance on short-term debt may make a government more vulnerable in a crisis framework, because of the need to roll over increased amounts of debt.…”