Business and Finance Lectures

Posts Tagged ‘Statistical an Economically Significant Determinant’

We exploit a panel of 72 U.S. dollar-denominated bonds issued by Latin American Publicly listed FIRMS Between 1996 and 2005 to answer the Following three questions: a) is Sovereign Risk and statistical an Economically Significant Determinant of the corporate credit spread, controlling for firm and Characteristics specific bond?, 2) If yes, do market participants Apply the rule ADOPTED by Sovereign ceiling rating agencies in the pricing of Our bond market data?, and 3) how do market views compare with the rating agencies Each ceiling for corporate policy? We find strong evidence of an Economically and Statistically significant effect of Sovereign Risk on corporate spreads across Different panel Econometric specifications and bonds. Moreover, markets do Not Apply the ceiling rule in 77% to 90% of the sample and bonds we are These Findings Consistent with rating agencies’ Policies Towards the Latter for about 50% of the FIRMS.

Speaker: Dr. Martin Grandes
Director and Research Professor, Centre for Applied Business School Professor UBA UCA, former Executive Director of the Center for Financial Stability exDecano School of Government at American University in Paris and worked in international organizations, OECD, BIS, ECLAC.