The methodology to estimate the country risk
Filippov D.I.1
1 Российский экономический университет им. Г.В. Плеханова
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Journal paper
Russian Journal of Entrepreneurship *
Volume 20, Number 4 (April 2019)
* Этот журнал не выпускается в Первом экономическом издательстве
Abstract:
Under financial and digital globalization increasing conditions of the world financial markets, possibility of an adequate and qualitative assessment of country risk increases significantly, both for highly industrialized and developing countries. Country risk is characterized by a close intertwining of many financial, economic, and socio-political variables, the complex assessment of which is not an easy task. The correct country risk assessment allows to develop and make the right strategic and investment decisions. In this context, the formation of modern, adequate and effective country risk assessing approaches, which allows to take into account the specifics, becomes an urgent task. In today's market economy, understanding the role of country risk is becoming a necessary reality of today. Currently, there are many approaches to assessing country risk. Most of them are developed by large international organizations, including rating agencies, multinational banks, etc. In most cases, this kind of methodology is either not disclosed (only general issues and the indicators under consideration are disclosed) or it is not possible to collect, process, analyze and calculate without attracting a large number of specialists with a considerable waste of time. One of the advantages of the proposed author's calculation methodology is the simplicity of calculation (based on publicly available information) with a high level of relevance of the data obtained.
Keywords: country risk, sovereign credit rating, premium for country risk, sovereign yield spread, default spread of the country
JEL-classification: F60, F69, F62
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