Özet:

Sovereign credit ratings given by international credit rating agencies play an important role in determining the direction of fund flows among countries. Especially newly industrialized countries consistently need financing in order to make the development sustainable and to finance future investments. In this study, the factors affecting the credit ratings of newly industrialized countries are discussed. Foremost among these factors, the rule of law, the government size, the regulatory efficiency, and the open markets are considered as indicators of the economic freedom index. Moreover, the growth rate of gross domestic product and inflation rate are included into the model to control the macroeconomic and income levels of the countries. The parameters were estimated by applying Driscoll-Kraay Standard Errors analysis on the panel data set spanning from 1995 to 2021. As a result of the analysis, it is seen that all economic freedom index indicators except the open market indicator have a positive and significant effect on the credit ratings of countries. Consequently, the study argues that the newly industrialized countries' taking steps to improve their economic freedom will reduce the risk factors of the countries and thus achieve investment-grade credit ratings.

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