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cc-by-nc-nd, (c) Uribe Gil et al., 2021
Si us plau utilitzeu sempre aquest identificador per citar o enllaçar aquest document: https://hdl.handle.net/2445/182600

Risk Spillovers between Global Corporations and Latin American Sovereigns: Global Factors Matter

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We study volatility spillovers between the corporate sector’s and Latin American countries’ CDS. Daily data from October 14 2006 to August 23 2021 are employed. Spillovers are computed both for the raw data and for filtered series which factor out the effect of global common factors on the various CDS series. Results indicate that most spillovers occur within groups, i.e., within countries and within global corporations. However, considerable spillovers are also registered from LAC sovereigns to corporations and vice versa. Interesting differences are encountered between filtered and unfiltered data. Specifically, spillovers from countries to corporations are overestimated (in about 4.3 percentage points) and spillovers from corporations to sovereigns are underestimated (in about 5.8 percentage points) when unfiltered data is used. This result calls for a revision of results obtained from studies that do not consider the role of global common factors on system spillovers. Like in most related studies, spillovers show considerable time-variation, being larger during times of financial or economic distress. When looking at total system spillovers over time, those corresponding to unfiltered series are always larger than those corresponding to filtered series. The difference between the two time-series is largest in times of distress, indicating that global factors play a major role in times of crises. Similar conclusions are derived from network analysis.

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URIBE GIL, Jorge mario, GÓMEZ-GONZÁLEZ, José e., VALENCIA, Oscar m.. Risk Spillovers between Global Corporations and Latin American Sovereigns: Global Factors Matter. _IREA – Working Papers_. 2021. Vol.  IR21/18. [consulta: 23 de gener de 2026]. [Disponible a: https://hdl.handle.net/2445/182600]

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