Sovereign Ratings and National Culture (2021)
Type of ContentJournal Article
AuthorsDang H, Partington Gshow all
Default by sovereign governments depends upon their willingness to default and the nation’s capacity to pay. These are major factors considered by rating analysts and both may be affected by national culture. We hypothesise that ratings are related to culture and empirically examine the relation between culture and both levels and changes in sovereign ratings. Sovereign ratings have traditionally been modelled in terms of macro-economic variables, rating outlook and rating history. Culture variables are significant when included in such models and their addition results in better models as judged by the QIC statistic and likelihood ratio tests. The significance of culture variables is robust to replication and to estimation using instrumental variables.
CitationDang H, Partington G (2021). Sovereign Ratings and National Culture. Pacific-Basin Finance Journal.
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Keywordssovereign debt; sovereign rating; national culture; rating history; rating outlook; rating changes
ANZSRC Fields of Research14 - Economics::1402 - Applied Economics::140210 - International Economics and International Finance
15 - Commerce, Management, Tourism and Services::1502 - Banking, Finance and Investment::150201 - Finance