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Organizational capital and credit ratings

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  • Panta, Humnath
  • Narayanasamy, Arun
  • Panta, Ayush

Abstract

This study uses pooled OLS to examine the effect of organizational capital on credit ratings using a large sample of US firm data from 1989 to 2017. The main finding reveals that firms with higher organizational capital receive higher credit ratings. This finding is robust to numerous robustness tests, alternative estimation techniques, and attempts to mitigate omitted variable and endogeneity concerns. Further, the positive effect of organizational capital on credit ratings is more prominent when firms are more financially constrained. Overall, our findings reveal the importance of organizational capital in the credit ratings of a firm.

Suggested Citation

  • Panta, Humnath & Narayanasamy, Arun & Panta, Ayush, 2023. "Organizational capital and credit ratings," Finance Research Letters, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:finlet:v:57:y:2023:i:c:s1544612323006499
    DOI: 10.1016/j.frl.2023.104277
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    More about this item

    Keywords

    Credit rating; Organizational capital;

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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