Do Global Credit Rating Agencies Think Globally? The Information Content of Firm Ratings around the World
AbstractWhat is the information content of firm ratings? We disentangle the relative contribution to firms? ratings of sovereign risks and individual firms? performance indicators, reportedly employed by rating agencies. We reach three conclusions. First, sovereign risks? contribution is disproportionately greater in developing countries vis-ý-vis developed countries. Second, even controlling for the ?country ceiling effect??private ratings being constrained by their sovereign?s rating?firm ratings? information content is much smaller in developing countries. Third, cross-country indicators of information quality help explain but do not solve the puzzle entirely. Thus, global rating agencies do not (yet) think globally.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2002 with number 74.
Date of creation: 29 Aug 2002
Date of revision:
Contact details of provider:
Postal: Office of the Secretary-General, School of Economics and Finance, University of St. Andrews, St. Andrews, Fife, KY16 9AL, UK
Phone: +44 1334 462479
Web page: http://www.res.org.uk/society/annualconf.asp
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-07-08 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Ricardo Correa & Kuan‐Hui Lee & Horacio Sapriza & Gustavo A. Suarez, 2014.
"Sovereign Credit Risk, Banks' Government Support, and Bank Stock Returns around the World,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 46(s1), pages 93-121, 02.
- Ricardo Correa & Kuan-Hui Lee & Horacio Sapriza & Gustavo Suarez, 2012. "Sovereign credit risk, banks' government support, and bank stock returns around the world," International Finance Discussion Papers 1069, Board of Governors of the Federal Reserve System (U.S.).
- Seung Han & Yoon Shin & Walter Reinhart & William Moore, 2009. "Market Segmentation Effects in Corporate Credit Rating Changes: The Case of Emerging Markets," Journal of Financial Services Research, Springer, vol. 35(2), pages 141-166, April.
- Eduardo Borensztein & Kevin Cowan & Patricio Valenzuela, 2013.
"Sovereign Ceilings “Lite”? The Impact of Sovereign Ratings on Corporate Ratings,"
Documentos de Trabajo
299, Centro de Economía Aplicada, Universidad de Chile.
- Borensztein, Eduardo & Cowan, Kevin & Valenzuela, Patricio, 2013. "Sovereign ceilings “lite”? The impact of sovereign ratings on corporate ratings," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4014-4024.
- Blumenstock, Hendrik & von Grone, Udo & Mehlhorn, Marc & Merkl, Johannes & Pietz, Marcus, 2012. "Einflussfaktoren von CDS-Spreads als Maß für das aktuelle Bonitätsrisiko: Liefert das Rating eine Erklärung?," Bayreuth Working Papers on Finance, Accounting and Taxation (FAcT-Papers) 2012-03, University of Bayreuth, Chair of Finance and Banking.
- Klein, Christian & Stellner, Christoph, 2014. "Does sovereign risk matter? New evidence from eurozone corporate bond ratings and zero-volatility spreads," Review of Financial Economics, Elsevier, vol. 23(2), pages 64-74.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.