Credit Rating Determinants for European Countries

The purpose of this article is to analyse factors that can influence on the European country's credit rating. The analysis was performed according to the level of economic development in accordance with the division proposed by the World Bank. There were applied static and dynamic panel data models. There were used data from the World Bank database and the database of Thomson Reuters for the years 2002-2012. The full sample was divided into subsamples due to the level of economic development. As dependent variables were used long- and short-term issuer credit ratings given by Standard & Poor's and Moody's Investor Services. Ratings were decomposed linearly on numeric variables. As dependent variables we used macroeconomic data, such as GDP per capita, real GDP growth, inflation, fiscal deficit, current account balance, external debt to GDP, foreign reserves. We also analysed how the previous credit rating notes and the communication effect between credit rating agencies influence on the current country's standing