Comments on Natural Disasters and International Financial Accessibility in Developing Countries

Shandre M. Thangavelu,  Universiti Sains Malaysia: This paper examines the relationship between natural disasters and accessibility to investment and finance after the occurrence of natural disasters. There is a need for external financial support for post-disaster reconstruction as most of the domestic financial structure becomes weaker after a natural disaster. This paper examines the effectiveness of external financial support (foreign aid) for developing countries in improving their financial accessibility after natural disasters, and the impact of natural disasters and financial accessibility (sovereign credit ratings). The paper also adopts a panel data framework of selected countries from 1990 to 2014 to examine the impact of natural disasters and foreign aid on sovereign credit ratings (as proxies for financial accessibility indicator). The results indicate that natural disasters affect sovereign ratings (financial accessibility) negatively. Foreign aid during natural disasters (complementary effects) have a positive impact on sovereign ratings in the panel of countries...