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Do financial markets reward government spending efficiency?

2022Journal article Open access
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dc.contributor.authorAfonso, António
dc.contributor.authorSalles, João Tovar
dc.contributor.authorVenâncio, Ana
dc.date.accessioned2022-09-06T15:07:41Z
dc.date.available2022-09-06T15:07:41Z
dc.date.issued2022
dc.description.abstractWe provide a novel set of government spending efficiency scores for the OECD countries and then assess to what extent capital markets perceive government efficiency increases (decreases) as part of the determinants of sovereign rating decisions. Public efficiency scores are computed via data envelopment analysis. Then, we rely notably on ordered response models to estimate the response of sovereign ratings to changes in efficiency scores. Covering 35 OECD countries over the period 2007–2020, we find that increased public spending efficiency is rewarded by financial markets via higher sovereign debt ratings. In addition, higher inflation and government indebtedness lead to sovereign rating downgrades, while higher foreign reserves contribute to rating upgrades.pt_PT
dc.description.versioninfo:eu-repo/semantics/publishedVersionpt_PT
dc.identifier.citationAfonso, António; João Tovar Jalles and Ana Venâncio. (2022). "Do financial markets reward government spending efficiency?". Journal of International Financial Markets, Institutions and Money, Vol. 77: 101505.pt_PT
dc.identifier.doi10.1016/j.intfin.2022.101505pt_PT
dc.identifier.issn1042-4431
dc.identifier.urihttp://hdl.handle.net/10400.5/25398
dc.language.isoengpt_PT
dc.publisherElsevierpt_PT
dc.subjectGovernment Spending Efficiencypt_PT
dc.subjectDEApt_PT
dc.subjectPanel Analysispt_PT
dc.subjectOrdered Probit (Logit)pt_PT
dc.subjectSovereign Ratingspt_PT
dc.subjectRating Agenciespt_PT
dc.titleDo financial markets reward government spending efficiency?pt_PT
dc.typejournal article
dspace.entity.typePublication
rcaap.rightsopenAccesspt_PT
rcaap.typearticlept_PT

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