HOW RELEVANT IS SOVEREIGN DEBT STRUCTURE?

摘要

Literature on sovereign debt structure is centred on theoretical work and anecdotal evidence, while empirical evidence on the subject remains inadequate and inconclusive. This study makes an attempt to empirically examine the impact of sovereign debt structure on the likelihood of sovereign default for developing countries, by using panel logit model. We find that proportion of commercial bank loans, bilateral debt, grace period on official debt, and growth rate of outstanding debt affect the likelihood of default of a sovereign debtor. We test the stability of our results over different model specifications. We show that debt structure variables are relevant to a default model as they provide important information about the riskiness of a debtor, beyond its macroeconomic performance.