Foreign Investment, Reputation and the Predictability of Chinese Credit Ratings
- 10.2991/aebmr.k.201211.056How to use a DOI?
- Sino-foreign credit rating agencies, credit rating, rating adjustment, reputation effect
This study examines how foreign investment in Chinese credit rating agencies affects the predictability of Chinese bond market ratings from January 1, 2013, to June 30, 2019. Empirical results show that the latest rating issued by both domestic and Sino-foreign rating agencies can reflect the probability of default, at least that of default in rating day. Furthermore, rating agencies with large market shares downgrade ratings to speculative grade near the day of default, even downgrading on the day of default. Reputation effects may prompt rating agencies in which foreign companies invest or with whom they cooperate to downgrade ratings sharply.
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Xing-yue Zhan AU - Chao-hung Yu PY - 2020 DA - 2020/12/14 TI - Foreign Investment, Reputation and the Predictability of Chinese Credit Ratings BT - Proceedings of the Fifth International Conference on Economic and Business Management (FEBM 2020) PB - Atlantis Press SP - 333 EP - 344 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.201211.056 DO - 10.2991/aebmr.k.201211.056 ID - Zhan2020 ER -