masterThesis
Foreign perception of sovereign risk : an event study of the colombian armed conflict
Fecha
2010Registro en:
TMEC 0004 2010
Autor
Castañeda Aguilar, Raúl
Institución
Resumen
This paper studies the relationship between some of the mostimportant recent events of the Colombian armed conflict and the foreignperception of risk of investment, as measured by the Credit Default Swap(CDS) for the Colombian government. Combining two recent methodologies Iestimate the causal effect of conflict events widely publicized bythe international media on the CDS. I construct a synthetic control group touse as the non-conflict counterfactual of the actual Colombian CDS andcompare its behavior around conflict-event days with that of the actual(conflict-affected) Colombian CDS. Results suggest that the impact ofconflict on the foreign perception of risk depend on on the specifics ofeach event: Some events are perceived as good and some other as badinvestment signals by foreign investors.