The Impact of Governance and Political Instability on the CDS Spread
摘要
With the sharp rise in sovereign default risk of many countries in the world, measuring sovereign credit risk and searching for the potential determinants of default sovereign risk become of great importance. Through this paper, we try to contribute to a better understanding of the mechanisms behind sovereign default risk in the Mena region, motivated by a context of elevated complexity triggered by turmoil of financial, economic and political environment. The main purpose of this paper is centered around the concept of sovereign risk, and the political risk as well. We consider three sets of political variables, which may influence the level of sovereign default risk: the nature of the political system, political stability, and the quality of governance. a panel regression analysis is conducted on a sample of 14 countries in which 12 MENA Countries in the period between 2006 Q1 and 2022 Q3.