IDEAS home Printed from https://ideas.repec.org/p/txa/wpaper/0601.html
   My bibliography  Save this paper

Corruption and Creditworthiness: Evidence from Sovereign Credit Ratings

Author

Listed:
  • Craig A. Depken

    (Department of Economics, University of Texas at Arlington)

  • Courtney LaFountain

    (Department of Economics, University of Texas at Arlington)

  • Roger Butters

    (Department of Economics, University of Nebraska - Lincoln)

Abstract

We estimate the impact of corruption on a country's creditworthiness. Corruption affects creditworthiness through its impact on the size of the formal sector of an economy. We find that creditworthiness, as measured by sovereign credit ratings, is decreasing in corruption. It follows from our benchmark estimates that a one standard deviation decrease in corruption improves sovereign credit ratings by almost a full rating category (e.g. BBB to A). On long term foreign currency denominated debt, this translates into annual savings of roughly $10,100 for every $1 million of debt.

Suggested Citation

  • Craig A. Depken & Courtney LaFountain & Roger Butters, 2006. "Corruption and Creditworthiness: Evidence from Sovereign Credit Ratings," Working Papers 0601, University of Texas at Arlington, Department of Economics.
    • Handle: RePEc:txa:wpaper:0601
    as

    Download full text from publisher

    File URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=899414
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:txa:wpaper:0601. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shushanik Papanyan (email available below). General contact details of provider: https://edirc.repec.org/data/deutaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.