Abstract:

      The country risk research has recorded a spectacular growth in the past four decades, being mainly associated with the investigation of the economic and financial difficulties the countries are facing, the factors that are related to these difficulties and their impact  on economic policy making, as well as on the business and investment environment. The country risk analysis combines a wide range of qualitative and quantitative information translated into measures of political, economic and financial risk that serve for the calculation of composite risk ratings. Starting from the existing major risk rating systems this paper proposes a multiple regression model for country risk assessment using the main economic-financial and political variables. It is based on data provided by international organizations such as the International Monetary Fund, the World Bank, the Eurostat, etc. as well as by previous research papers of a large interest among the experts in this field. The model offers a complementary instrument for quickly, promptly assessing the country ratings based on the most relevant characteristics employed by prestigious agencies such as Standard and Poor’s, Moody’s, the Institutional Investor, etc. The model results are consistent with the ratings provided by these agencies, confirming its usefulness for country risk research.