This paper examines the effects of major macroeconomic fundamentals on emerging market bond index spreads by using a panel of 25 emerging market countries’ bond index spreads and a set of macroeconomic indicators between 2000 and 2009. The findings of the study suggest that there is a positive relationship between bond index spread and foreign direct investment, inflation and a negative relationship between bond index spread and GDP, reserve in total external debt. Major determinants of the emerging markets bond index are determined by using regression analysis based on ordinary least squares method has been applied consisting of fixed effect model, random effect model, but Hausman test showed that fixed effect model is more appropriate.
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