EUROPEAN TRANSITION COUNTRIES' RISK CLASSIFICATION AND RANKING: TEN YEARS LATER

The paper uses the original methodology proposed in Tomić-Plazibat et al. (2010) for country risk assessment of the European transition countries. The methodology combines multivariate cluster analysis aided by ANOVA testing and multicriteria PROMETHEE method, evaluating the performance of countries...

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Bibliographic Details
Published inChallenges of Europe : International Conference Proceedings pp. 193 - 206
Main Authors Aljinović, Zdravka, Pivac, Snježana, Perić, Blanka Škrabić
Format Conference Proceeding
LanguageEnglish
Published Split Sveuciliste u Splitu 01.01.2017
Subjects
Classification
Cluster analysis
Credit risk
Default
Economic conditions
Economic growth
Foreign investment
GDP
Gross Domestic Product
International finance
Life expectancy
Methods
Multivariate analysis
Political risk
Ratings & rankings
Risk assessment
Securities markets
Trends
Variables
Europe
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Summary:The paper uses the original methodology proposed in Tomić-Plazibat et al. (2010) for country risk assessment of the European transition countries. The methodology combines multivariate cluster analysis aided by ANOVA testing and multicriteria PROMETHEE method, evaluating the performance of countries while considering their economic and socio-political characteristics. This combination of the existing classification and ranking methodologies enables dynamic (over years) and relative (in particular year) analysis of credit risk of observed countries. The methodology was originally applied to the sixteen Central, Baltic and South-East European transition countries for 2005 and 2007. Ten years later, national, regional and for sure global political - economic conditions, situations and positions highlight once again the issue of country-risk assessment of the European transition countries. In the paper, the proposed methodology is applied, now to the seventeen countries, according to fifteen socio-political and economic-financial criteria. The paper findings have shown that within ten years, negative trends prevailed; differences/distances between countries on ranking lists became higher, in almost all cases values of socio-political indicators are in the best case stagnating, if not declining. Unfortunately, for some countries, especially for South-East non EU members' countries, with deep economic problems, this constant fall of socio-political conditions and environment makes them highly risky in the sense of country risk, delaying so needed stable economic conditions and faster economic growth.
ISSN:1847-4497