Boon or Burden? The Effect of Private Sector Debt on the Risk of Sovereign Default in Developing Countries

We explore how the share of the private sector in total external debt affects perceived creditworthiness and the likelihood of sovereign default in developing countries. While there are theoretical arguments both in favor and against a stabilizing role of private-sector borrowing, the evidence clearly supports the notion that a greater share of the private sector in total external debt is associated with a reduced likelihood of sovereign default.

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Year of publication:	2008
Authors:	Celasun, Oya ; Harms, Philipp
Publisher:	Göttingen : Verein für Socialpolitik, Ausschuss für Entwicklungsländer
Subject:	International Investment \| Sovereign Risk

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Series:	Proceedings of the German Development Economics Conference, Zürich 2008 ; 16
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Conference Paper
Language:	English
Other identifiers:	65408789X [GVK] hdl:10419/39887 [Handle] RePEc:zbw:gdec08:16 [RePEc]
Classification:	F34 - International Lending and Debt Problems ; O16 - Financial Markets; Saving and Capital Investment
Source:	EconStor

Persistent link: https://ebvufind01.dmz1.zbw.eu/10010301428