LAHET, Delphine; PRAT, Stéphanie

doi:10.1007/s10290-022-00463-4

Bordeaux Sciences Economiques [BSE]

PRAT, Stéphanie

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Article de revue

Ce document a été publié dans

Review of World Economics. 2022-04-05

Résumé en anglais

The aim of this article is to investigate the relationship between the exposition of emerging countries to original sin and the internationalization process of their currency in a nonlinear framework. For that purpose, we use a panel dataset of 12 emerging countries from 2005Q4 to 2018Q3, and we implement two complementary methodologies: a multiplicative interaction model and a dynamic panel threshold model. We investigate the impact of the measures of the currency internationalization process on the ability of emerging countries to issue debt in local currency. We show that the Economic size and the institutional quality of emerging countries, as well as the FX turnover of their currency, interact when explaining the share of local-currency external debt. Moreover, our results reveal the existence of thresholds beyond which there is a change in the evolution of original sin, notably for the economic size and the governance index of emerging countries.< Réduire

Mots clés en anglais

Original sin

Currency internationalization

Nonlinear effects

Emerging markets

URI

https://oskar-bordeaux.fr/handle/20.500.12278/136635

DOI

http://dx.doi.org/10.1007/s10290-022-00463-4

Unités de recherche

Bordeaux Sciences Economiques / Bordeaux School of Economics (BSE) - UMR 6060

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Local-currency debt and currency internationalization dynamics: A nonlinear framework

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Résumé en anglais

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