Does SDDS Subscription Reduce Borrowing Costs for Emerging Market Economies?

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Abstract: Does macroeconomic data transparency—as signaled by subscription to the IMF's Special Data Dissemination Standard (SDDS)—help reduce borrowing costs in international capital markets? This question is examined using data on new issues of sovereign foreign-currency-denominated (U.S. dollar, yen, and euro) bonds for several emerging market economies. Panel econometric estimates indicate that spreads on new bond issues declined on average by close to 20 percent, or by an average of about 55 basis points for sample countries, following SDDS subscription.
[JEL C22, F33, F34]