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The impact of ICT diffusion on sovereign cost of debt

Kotzinos, Apostolos and Psychoyios, Dimitrios and Vlastakis, Nikolaos (2021) 'The impact of ICT diffusion on sovereign cost of debt.' International Journal of Banking, Accounting and Finance, 12 (1). 16 - 51. ISSN 1755-3830 (In Press)

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Abstract

We examine the effect of a country’s level of information and communication technologies (ICT) diffusion on its credit rating and cost of debt. ICT diffusion is approximated using the Networked Readiness Index, which is designed to capture a country’s capacity and preparedness to participate in the digital economy. We adopt a modified random effects approach which allows us to distinguish between short and long run effects on a dataset of 65 countries for a time span of ten years. We show that ICT have a significant impact on a country’s credit rating and cost of debt which is robust to the presence of other variables proposed in the literature. The effect is stronger for non-OECD countries, indicating a pathway for developing countries to improve their access to debt markets. Our conclusions are robust to the advent of the recent financial crisis.

Item Type: Article
Uncontrolled Keywords: Credit ratings; Sovereign debt; Information and Communication Technologies; E-readiness; Developing countries
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 19 Nov 2019 10:56
Last Modified: 20 Jan 2021 12:15
URI: http://repository.essex.ac.uk/id/eprint/25744

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