Sovereign defaulters: Do international capital markets punish them?

• 成果类型: Article
• 署名作者: Fuentes, Miguel; Saravia, Diego
• 署名单位: Central Bank of Chile
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2009.06.005
• 发表日期: 2010
• 页码: 336-347
• 关键词: Sovereign default; Sovereign debt; Foreign direct investment; Debt repayment

摘要

We empirically study whether countries that default on their debt experience a reduction in their capital inflows, as suggested by the literature. Our data contain information on (i) the defaulter countries and their creditors and (ii) bilateral foreign direct investment (FDI) flows. With these we can study how FDI flows are affected by sovereign default by distinguishing between those flows coming from defaulters' creditor countries and others. According to our estimations, this distinction is crucial since the decline of FDI in flows after default is markedly concentrated on those flows originating in defaulters' creditor countries. The decay in FDI flows is higher in the years closer to the default date and for countries that have defaulted more times. We do not find evidence that countries shut their doors to defaulters' investment abroad, which is also a cost of default suggested in the literature. (C) 2009 Elsevier B.V. All rights reserved.