Sovereign Credit Ratings and Asian Financial Markets

Each region/country seeks to become more efficient gain the confidence of potential investors. Most Asian economies are categorized as emerging markets, where role financial markets has even intensified provide services increasing economic and activities. market momentously suffered during Asian, global crisis. The mass destruction was mainly caused due mounting uncertainty, which spillover throughout region, investors lost their confidence. Considering pivotal implications evolve sovereign credit rating announcements, this study aims model announcements by Standard Poor’s, Moody’s on development region. For 24 countries/regions, we perform a regression analysis changes based index its factors. findings Driscoll Kraay’s robust estimator reveals that improvement in score enhances Moreover, applied several robustness checks, such alternative estimators, measures, three sub-dimensions development. According from these positive impact ratings region is robust. Unlike prior literature (which confined event approach), utilizes historical grades establish relationship under standard error clustering approach. Due diversity investors’ speculations, propose micro-level extension present overcome difference country policy.