Do financial markets reward government spending efficiency?

Detalhes bibliográficos
Autor(a) principal: Afonso, António
Data de Publicação: 2022
Outros Autores: Salles, João Tovar, Venâncio, Ana
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.5/25398
Resumo: We 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.
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spelling Do financial markets reward government spending efficiency?Government Spending EfficiencyDEAPanel AnalysisOrdered Probit (Logit)Sovereign RatingsRating AgenciesWe 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.ElsevierRepositório da Universidade de LisboaAfonso, AntónioSalles, João TovarVenâncio, Ana2022-09-06T15:07:41Z20222022-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/25398engAfonso, 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: 101505.1042-443110.1016/j.intfin.2022.101505info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:54:57Zoai:www.repository.utl.pt:10400.5/25398Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:09:16.915485Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Do financial markets reward government spending efficiency?
title Do financial markets reward government spending efficiency?
spellingShingle Do financial markets reward government spending efficiency?
Afonso, António
Government Spending Efficiency
DEA
Panel Analysis
Ordered Probit (Logit)
Sovereign Ratings
Rating Agencies
title_short Do financial markets reward government spending efficiency?
title_full Do financial markets reward government spending efficiency?
title_fullStr Do financial markets reward government spending efficiency?
title_full_unstemmed Do financial markets reward government spending efficiency?
title_sort Do financial markets reward government spending efficiency?
author Afonso, António
author_facet Afonso, António
Salles, João Tovar
Venâncio, Ana
author_role author
author2 Salles, João Tovar
Venâncio, Ana
author2_role author
author
dc.contributor.none.fl_str_mv Repositório da Universidade de Lisboa
dc.contributor.author.fl_str_mv Afonso, António
Salles, João Tovar
Venâncio, Ana
dc.subject.por.fl_str_mv Government Spending Efficiency
DEA
Panel Analysis
Ordered Probit (Logit)
Sovereign Ratings
Rating Agencies
topic Government Spending Efficiency
DEA
Panel Analysis
Ordered Probit (Logit)
Sovereign Ratings
Rating Agencies
description We 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.
publishDate 2022
dc.date.none.fl_str_mv 2022-09-06T15:07:41Z
2022
2022-01-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.5/25398
url http://hdl.handle.net/10400.5/25398
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Afonso, 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.
1042-4431
10.1016/j.intfin.2022.101505
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
repository.mail.fl_str_mv
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