Please use this identifier to cite or link to this item: http://hdl.handle.net/10125/64911

Regulatory Reform, Multiple Credit Ratings and the Quality of the Corporate Information Environment

File Size Format  
HARC 2020 paper 243.pdf 627.47 kB Adobe PDF View/Open

Item Summary

dc.contributor.author He Huang
dc.contributor.author Jiri Svec
dc.contributor.author Eliza Wu
dc.date.accessioned 2019-12-06T18:39:53Z
dc.date.available 2019-12-06T18:39:53Z
dc.date.issued 2019-08-31
dc.identifier.uri http://hdl.handle.net/10125/64911
dc.description.abstract This paper examines the change in the regulatory use of multiple credit ratings after the Dodd-Frank Act (Dodd-Frank). We find that post Dodd-Frank reform firms are less likely to demand a third rating, which is typically provided by Fitch. Third ratings also become less informative with a much weaker market impact on credit spreads for firms on opposite sides of the high yield (HY) - investment grade (IG) boundary. Moreover, we find that post-Dodd-Frank, firms without external monitoring from a third ratings agency systematically manage their earnings more and have higher cash flow and sales volatilities. Overall, the results shed light on the unintended consequences of Dodd-Frank on competition within the ratings industry, the quality of the information environment, and the cost of borrowing for issuers.
dc.subject regulation
dc.subject Dodd-Frank
dc.subject credit ratings
dc.subject bonds
dc.subject earnings management
dc.subject corporate risk-taking
dc.title Regulatory Reform, Multiple Credit Ratings and the Quality of the Corporate Information Environment
Appears in Collections: 05 Financial: Debt Market Research (Including Credit Ratings/Debt Contracts)


Please email libraryada-l@lists.hawaii.edu if you need this content in ADA-compliant format.

Items in ScholarSpace are protected by copyright, with all rights reserved, unless otherwise indicated.