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The effect of issuers’ digital transformation on bond rating quality: Evidence from China’s bond market

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  • Wu, Weihong
  • Zhou, Hui
  • Huo, Zheng

Abstract

Improving the quality of bond ratings has become an urgent issue for credit rating agencies, and the digital transformation of issuers presents a new opportunity to address this challenge. This study selects the bonds issued by Chinese A-share listed companies from 2014 to 2023, to explore the impact of issuers’ digital transformation on the quality of bond ratings and the underlying mechanisms. The results suggest that issuers’ digital transformation can enhance the quality of bond ratings. After conducting the robustness check, the results still demonstrate significance. Heterogeneity analysis reveals that the effect is more pronounced in samples with relatively severe financing constraints, those traded in the interbank market, and those located in regions with less favorable legal environments. Furthermore, mechanism tests show that issuers’ digital transformation can improve bond rating quality through enhancing information transparency and reducing issuer risk. This paper contributes to the research perspective on the economic consequences of digital transformation from the viewpoint of bond rating quality.

Suggested Citation

  • Wu, Weihong & Zhou, Hui & Huo, Zheng, 2025. "The effect of issuers’ digital transformation on bond rating quality: Evidence from China’s bond market," Research in International Business and Finance, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:riibaf:v:79:y:2025:i:c:s027553192500354x
    DOI: 10.1016/j.ribaf.2025.103098
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