Sovereign Debt Crises and Credit to the Private Sector
By Carlos Arteta, G. Hale. 2006
119 citations recorded by the source corpus.
We argue that, through its effect on aggregate demand and country risk premia, sovereign debt restructuring can adversely affect the private sector's access to foreign capital markets. Using fixed effect analysis, we estimate that sovereign debt rescheduling episodes are indeed systematically accompanied by a decline in foreign credit to emerging market private firms, both during debt renegotiations and for over two years after the agreements are reached. This decline is large (over 20%), statistically significant, and robust when we control for a host of fundamentals. We find that this effect is different for financial sector firms, for exporters, and for nonfinancial firms in the non-exporting sector. We also find that the effect depends on the type of debt rescheduling agreement.
Subfields: Finance, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/06b1aaeface56f5983f73d9d25539379936a881e
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In Finance
In Strategy and Management
Citations in the corpus
- Credit Supply During a Sovereign Debt Crisis (2018, unknown): “[5] Arteta, C.”
- Uncertain Fiscal Consolidations (2013, unknown): “The tax adjustment parameter, γ, is calibrated to 0.5 at annual rate, which is roughly consistent with estimates.4 The International Country Risk Guide’s (ICRG) index of political risk offers one way to calibrate the political factor, βp [see Arteta and Galina (2008)].”
- Heterogeneous Borrowers in Quantitative Models of Sovereign Default (2009, unknown): “Using micro-level data, Arteta and Hale (2006) find that sovereign debt”
- Fiscal Policy and Default Risk in Emerging Markets (2009, background): “Arteta and Hale (2006), Rose (2005) and Dooley (2000) among others, provide a rationale for the loss of output when countries face debt crises.”
- Real Effects of the Sovereign Debt Crisis in Europe: Evidence from Syndicated Loans (2018, unknown): “By aggregating micro-level data of foreign bond issuance and foreign syndicated bank loan contracts on the sector-country-month level, Arteta and Hale (2008) analyze emerging markets’ private sector access to international debt financing during several sovereign debt crises between 1980 and 2002.”
- A General Equilibrium Model of Sovereign Default and Business Cycles (2011, unknown): “07 with either = 0:8 or 0:6: (b) Parameters of the Armington Aggregator of Domestic and Imported Inputs Rows (6) and (7) report results for Armington elasticities lower ( md;m = 2:63) and higher ( md;m = 3:1) than the baseline ( md;m = 2:9).”
- A Network Analysis of Global Banking:1978-2009 (2011, unknown): “These results complement the literature on access to capital markets in the aftermath of debt crises (e.g., Ozler, 1993; Arteta and Hale, 2008; Fuentes and Saravia, 2009).”