SHENG-SYAN CHENChen, Hsien YiHsien YiChenChang, Chong ChuoChong ChuoChangYang, Shu LingShu LingYang2023-05-162023-05-162016-0303784266https://scholars.lib.ntu.edu.tw/handle/123456789/631098A country's economic growth exhibits a significant response to sovereign rating changes: a one-notch upgrade (downgrade) causes an increase (decline) of about 0.6% (0.3%) in re-rated countries' five-year average annual growth rates. The results hold after accounting for other determinants of economic growth and potential endogeneity problems, and are robust to the use of quarterly data. Changes in country rating affect economic growth via the interest-rate and capital-flow channels: narrower sovereign bond yield spreads and increased capital inflows are associated with upgrades, which stimulate re-rated countries' economic performance, and the converse holds for downgrades.enCapital flows | Economic growth | Sovereign credit rating revision[SDGs]SDG1[SDGs]SDG8[SDGs]SDG9[SDGs]SDG10journal article10.1016/j.jbankfin.2015.10.0122-s2.0-84952790561WOS:000370911400006https://api.elsevier.com/content/abstract/scopus_id/84952790561