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International Area Studies Review
[ Article ]
International Area Studies Review - Vol. 29, No. 3, pp.284-310
ISSN: 2233-8659 (Print)
Print publication date 30 Sep 2026
DOI: https://doi.org/10.69473/iasr.2026.29.3.284

Artificial Intelligence Development and Sovereign Bond Ratings

Lance Y. Hunter ; Glen Biglaiser*
Professor, Augusta University, Georgia
Regents Professor, University of North Texas, Texas

Correspondence to: *Email: Glen.Biglaiser@unt.edu

Abstract

Our research studies how Artificial Intelligence (AI) affects sovereign bond ratings. We expect that AI development has positive influences on domestic economic conditions, government effectiveness, and perceptions of government stability, resulting in higher bond ratings. Using sovereign bond ratings of 101 countries from 2020–2023, and including standard explanatory variables and controls for possible endogeneity, we discover that AI development supports higher bond ratings. Additionally, we incorporate robustness checks and use mediation analysis to identify the mechanisms connecting AI development and ratings. Our findings have important implications for understanding how AI development can influence capital costs for economies and governments now and in the future.

Keywords:

Artificial intelligence, Artificial intelligence development, Bond ratings, Economic conditions, Government effectiveness

AI Acknowledgment

Generative AI or AI-assisted technologies were not used in any way to prepare, write, or complete essential authoring tasks in this manuscript.

Conflict of Interest

The authors declare that there are no conflicts of interest in this research.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

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