Sovereign Borrowing by Developing Countries: What Determines Market Access?

42 Pages Posted: 9 Feb 2006

See all articles by Gaston Gelos

Gaston Gelos

Bank for International Settlements; Centre for Economic Policy Research (CEPR)

Ratna Sahay

International Monetary Fund (IMF) - Developing Country Studies Division; National Bureau of Economic Research (NBER)

Guido Sandleris

Johns Hopkins University - Paul H. Nitze School of Advanced International Studies (SAIS)

Date Written: November 2004

Abstract

What determines the ability of governments from developing countries to access international credit markets? We examine this question using detailed data on sovereign bond issuances and public syndicated bank loans since 1982. We find that traditional measures of a country`s links with the rest of the world (such as trade openness) and traditional liquidity and macroeconomic indicators do not help much in explaining market access. However, a country`s vulnerability to shocks and the perceived quality of its policies and institutions appear to be important determinants of its government`s ability to tap the markets. We are unable to detect strong punishment of defaulting countries by credit markets.

Keywords: Sovereign debt, international capital markets, syndicated bank loans, bond markets, developing countries

JEL Classification: F34, G15

Suggested Citation

Gelos, R. Gaston and Sahay, Ratna and Sandleris, Guido, Sovereign Borrowing by Developing Countries: What Determines Market Access? (November 2004). IMF Working Paper No. 04/221, Available at SSRN: https://ssrn.com/abstract=879046

R. Gaston Gelos (Contact Author)

Bank for International Settlements ( email )

Centralbankplatz 2
Basel, 4002
Switzerland
0612808201 (Phone)

HOME PAGE: http://https://www.bis.org/author/gaston_gelos.htm

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Ratna Sahay

International Monetary Fund (IMF) - Developing Country Studies Division ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-7181 (Phone)
202-623-7271 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Guido Sandleris

Johns Hopkins University - Paul H. Nitze School of Advanced International Studies (SAIS) ( email )

1740 Massachusetts Avenue, NW
Washington, DC 20036-1984
United States

HOME PAGE: http://sais-jhu.edu/faculty/sandleris

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