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Sovereign Risk (sovereign + risk)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Debt v. Foreign Direct Investment: The Impact of Sovereign Risk on the Structure of International Capital Flows

ECONOMICA, Issue 273 2002
Monika Schnitzer
The paper compares the two standard forms of international investment in developing countries, debt and foreign direct investment (FDI), from a finance perspective. The sovereign risks associated with debt finance are shown to be generally less severe than the ones that come with FDI. FDI is chosen only if the foreign investor is more efficient in running the project, if the project is risky, and if the foreign investor has a good outside option which deters creeping expropriation. The sovereign risk problem of FDI can be alleviated if the host country and the foreign investor form a joint venture. [source]

Sovereign Risk in the Classical Gold Standard Era,

THE ECONOMIC RECORD, Issue 271 2009
PRASANNA GAI
This paper reassesses the determinants of sovereign bond yields during the classical gold standard period (1872,1913) using the pooled mean group methodology. We find that, rather than lowering risk premia directly, membership of the gold standard hastened the convergence of sovereign bond spreads to their long-run equilibrium levels. Our results also suggest that investors looked beyond the gold standard to country-specific fundamental factors when pricing and differentiating sovereign risk. [source]

Sovereign risk, credibility and the gold standard: 1870,1913 versus 1925,31*

THE ECONOMIC JOURNAL, Issue 487 2003
Maurice Obstfeld
What determines sovereign risk? We study the London bond market from the 1870s to the 1930s. Our findings support conventional wisdom concerning the low credibility of the interwar gold standard. Before 1914 gold standard adherence effectively signalled credibility and shaved up to 30 basis points from country borrowing spreads. In the 1920s, however, simply resuming prewar gold parities was insufficient to secure benefits. Countries that devalued before resumption were treated more favourably, and markets scrutinised other signals. Public debt and British Empire membership were important determinants of spreads after World War One, but not before. [source]

Greece: How can companies manage the new risks?

JOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 6 2010
Bento J. Lobo
CEOs and CFOs must understand that political risk can have a significant impact on a company's profitability. The current situation in Greece is a prime example of this. But how does the risk of Greece's default affect U.S. firms doing business with Greek companies? The authors examine the impact on two kinds of U.S. firms: those exporting to Greece and those importing from Greece. The authors then look at ways to manage the impact of sovereign risk of default. © 2010 Wiley Periodicals, Inc. [source]

Sovereign risk, credibility and the gold standard: 1870,1913 versus 1925,31*

THE ECONOMIC JOURNAL, Issue 487 2003
Maurice Obstfeld
What determines sovereign risk? We study the London bond market from the 1870s to the 1930s. Our findings support conventional wisdom concerning the low credibility of the interwar gold standard. Before 1914 gold standard adherence effectively signalled credibility and shaved up to 30 basis points from country borrowing spreads. In the 1920s, however, simply resuming prewar gold parities was insufficient to secure benefits. Countries that devalued before resumption were treated more favourably, and markets scrutinised other signals. Public debt and British Empire membership were important determinants of spreads after World War One, but not before. [source]

Sovereign Risk in the Classical Gold Standard Era,

THE ECONOMIC RECORD, Issue 271 2009
PRASANNA GAI
This paper reassesses the determinants of sovereign bond yields during the classical gold standard period (1872,1913) using the pooled mean group methodology. We find that, rather than lowering risk premia directly, membership of the gold standard hastened the convergence of sovereign bond spreads to their long-run equilibrium levels. Our results also suggest that investors looked beyond the gold standard to country-specific fundamental factors when pricing and differentiating sovereign risk. [source]