InkLocal credit rating agencies: a new dataset

Marandola, Ginevra

doi:10.1016/j.ribaf.2016.03.006

Cited by 7 publications

(6 citation statements)

References 37 publications

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“…According to Marandola (2016), the rating agency industry is an oligopoly dominated by the pioneering Moody's and Standard and Poor's (S&P), as well as Fitch Ratings. They are responsible for a market share greater than 94% of the global market, and for years they were concentrated in the USA alone.…”

Section: Literature Review 21 Rating Agencies and Credit Ratingmentioning

confidence: 99%

“…According to Sylla (2002) and Marandola (2016, p. 84), the emergence of the first credit rating agencies occurred in the USA in the early 20th century. Owing to the construction of the railroad system, projects existed requiring financing by local investors, but these investors did not have accurate information about the borrowers, and there was a need for a credit rating.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Railway securities were, therefore, the first to earn a rating. Marandola (2016) states that over the years the credit rating business expanded, and by the 1990s almost all securities issued had a rating.…”

Section: Literature Reviewmentioning

confidence: 99%

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The impact of rating classifications on stock prices of Brazilian companies

Pagin

Gomes

Antônio

et al. 2021

JEFAS

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Purpose This paper aims to identify if there is an impact of the rating announcements issued by the agencies on the returns of the stocks of Brazilian companies listed on Brasil Bolsa Balcão, from August 2002 to August 2018, identifying which types of announcement (upgrade, downgrade or the same initial classification) cause variations in prices around the date of disclosure of the rating. Design/methodology/approach The event study methodology was applied to verify the market reaction around the announcement dates in a 21-day event window (−10, +10). The market model was used to calculate the abnormal returns (ARs), and subsequently, the accumulated ARs. Findings The hypotheses tests allowed to verify that the accumulated ARs are different, before and after the three types of rating announcements (upgrades, downgrades and the same classification); in upgrades, the mean of accumulated ARs increases in the days before the event, while in downgrades, this increase occurs after the event. This paper concluded that the rating announcements have an impact on the return of stock of the Brazilian market and that the market reaction occurs most of the time before the event happens, which indicates that the market can anticipate the information contained in the changes in credit ratings. Practical implications The results have considerable implications for portfolio managers, institutional investors and traders. It facilitates investment decision-making in the face of rating classification announcements. Market participants can pay more attention to their investment strategies and asset allocation during periods of risk rating announcements. Additionally, traders can understand the form of investment strategy for superior earnings. Originality/value The importance of the study is related to the fact that the results may explain the causes of specific movements in the Brazilian financial market related to a source of information that may or may not be able to influence the decisions of the financial agents that operate in this market. The justification is centred on the idea that, for investors who somehow react to the announcements, it is relevant to understand the impact of rating classifications on companies, as access to such information allows for more conscious decision-making.

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Section: Literature Review 21 Rating Agencies and Credit Ratingmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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The impact of rating classifications on stock prices of Brazilian companies

Pagin

Gomes

Antônio

et al. 2021

JEFAS

View full text Add to dashboard Cite

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“…Due to the good construction of American rating agencies, Japanese rating agencies and Korean rating agencies, many studies about the competition between GRAs and DRAs are mainly focused on these countries [7]. GRAs usually enter a domestic rating industry through the mergers and acquisitions of DRAs or by jointing with DRAs [8]. Due to increasing competition in the rating industry, GRAs may not contribute to the improvement of DRAs' rating quality and often lead to rating divergence; namely, DRAs provide higher ratings [9].…”

Section: Review Of the Literaturementioning

confidence: 99%

Short-term competition and long-term convergence between domestic and global rating agencies: Evidence from China

et al. 2020

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This article adds to the existing literature on global rating agencies (GRAs, i.e., the S&P, Moody's, and Fitch) and domestic rating agencies (DRAs). In our research, we introduce the reputation, rating cost and rating accuracy of rating agencies to improve the Hotelling model. According to the theoretical analysis and empirical tests, the results show that the open policy of the Chinese rating industry contributes to higher rating quality in the domestic bond market. This open policy leads to rating convergence between DRAs and GRAs from in the long term.

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“…The credit rating business started at the beginning of the 20th century in the United States during the construction of the rail system. The first agencies to provide rating services were Moody's and S&P that now dominate the market internationally (Marandola, 2016). The three main rating offices: Standard & Poor's, Moody's and Fitch were founded in the period 1909-1924(White, 2010Money Expert, 2011).…”

Section: Some Information On Credit Rating Officesmentioning

confidence: 99%

Is Credit Rating Reserved Territory for Credit Rating Agencies? A Multimoora Approach for European Firms and Countries

Brauers

Lepkova

2019

Technological and Economic Development of Economy

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Credit Rating Agencies rate firms and countries by internal experts but with a final qualitative judgment by their management acting as decision makers. These ratings on their turn influence the countries credit rating and ipso facto of their enterprises. The work of the CRA is in fact double: credit rating of firms and other organizations at one side and countries on the other. Considering the credit rating of firms, the CRA made significant mistakes during the Recession 2007−2009 and their judgment is too much American oriented, in any way from a European point of view. Consequently, in Europe many efforts were made to come to a new agency, but all efforts failed. It could be different for the rating of countries. Is a more scientific approach, eventually on a quantitative and structural basis, not possible? Therefore, MULTIMOORA, a quantitative method, is suggested. The study was made for all countries of the European Continent. Based on data available in 2013 and on their extrapolation, the results are quite comparable to the results of Standard & Poor’s Credit Rating System of the moment. As the classifications of Moody’s and Fitch are very similar to those of Standard & Poor’s the outcome would be similar for these other Credit Rating Agencies.

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InkLocal credit rating agencies: a new dataset

Cited by 7 publications

References 37 publications

The impact of rating classifications on stock prices of Brazilian companies

The impact of rating classifications on stock prices of Brazilian companies

Short-term competition and long-term convergence between domestic and global rating agencies: Evidence from China

Is Credit Rating Reserved Territory for Credit Rating Agencies? A Multimoora Approach for European Firms and Countries

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