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Significance of Financial and Non Financial Information on Credit Rating: An Empirical Study on Banking and Insurance Sectors of Pakistan

Author

Listed:
  • Rashid, Muhammad Khalid
  • Haq, Muhammad Noor ul
  • Khalid, Umair
  • Basit, Abdul

Abstract

Purpose: Apart from standard spheres of financial institutions’ performance such as asset quality, profitability, liquidity and efficiency; the study investigates the influence of non-financial factors such as governance and management.Design/Methodology/Approach: This study utilizes 2009 through 2018 data for the sample of commercial banks and insurance companies of Pakistan to analyze the significance of financial and non-financial information on credit rating. The study is done by employing frequently used Fully Modified Ordinary Least Square (FMOLS).Findings: The main contribution lies including explanatory variables from various areas that have an impact on the financial position of the examined banks and insurance companies.Implications/Originality/Value: The obtained results suggest that the combined use of financial and non-financial information tends to a significant impact on credit rating.

Suggested Citation

  • Rashid, Muhammad Khalid & Haq, Muhammad Noor ul & Khalid, Umair & Basit, Abdul, 2021. "Significance of Financial and Non Financial Information on Credit Rating: An Empirical Study on Banking and Insurance Sectors of Pakistan," Journal of Accounting and Finance in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 7(3), pages 757-765, September.
    • Handle: RePEc:src:jafeec:v:7:y:2021:i:3:p:757-765
    DOI: http://doi.org/10.26710/jafee.v7i3.1986
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