Rating Agencies as Gatekeepers to the Capital Market: Practical Implications of 40 Years of Research

Lagner, Thomas; Knyphausen‐Aufseß, Dodozu

doi:10.1111/j.1468-0416.2012.00173.x

Cited by 14 publications

(14 citation statements)

References 274 publications

(413 reference statements)

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“…For those studies that in fact discuss the effect of country characteristics for certain FDI modes, Hyun and Kim () observe that greenfield investments have caught the primary academic attention, while M&A have lagged behind. Apart from complementing the extant research in this respect, the results of this paper simultaneously enrich the so far sparse literature body on the direct impact of credit ratings on corporations (Lagner and zu Knyphausen‐Aufseß, ). Here, the insights will be of particular interest to acquisitive companies or prospective targets, especially in countries with instable rating situations.…”

Section: Introductionmentioning

confidence: 57%

The Role of Sovereign Ratings in M&A Markets: Empirical Evidence from Latin America and South East Asia

Nguyen¹,

Knyphausen‐Aufseß²

2016

Financial Market

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Sovereign ratings have not only been regarded as an indicator of country risk for foreign investors, but also as a determining factor for capital market conditions of domestic firms. Although they have attracted growing interest in academic research, the extant literature has so far rendered only minor attention to their role in corporate strategic investment decisions. This paper focuses on the influence of sovereign ratings on domestic and cross‐border M&A decisions in a sample of Latin American and South East Asian countries. The empirical results lend support to the proposition that sovereign ratings condition the level of activity in domestic M&A markets as well as the attractiveness of domestic M&A targets for foreign acquirers. Moreover, the foreign bidders’ choice of ownership stakes in acquisitions appears to be affected. The paper thus highlights the relevance of sovereign ratings as a country‐level factor to be considered in studies of corporate investment behavior.

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Section: Introductionmentioning

confidence: 57%

The Role of Sovereign Ratings in M&A Markets: Empirical Evidence from Latin America and South East Asia

Nguyen¹,

Knyphausen‐Aufseß²

2016

Financial Market

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“…This paper concluded that there is strong relationship between the interest rate and capital flow. Lagner and Knyphausen-Aufseß (2012), investigated the practical approach towards the capital and money market. This paper explains the relationship between the money market and capital market.…”

Section: Introductionmentioning

confidence: 99%

Capital Flows and Money Supply: The Degree of Sterilization in Pakistan

Ali

Sajjad

2017

SIJMB

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The present study proposes to analyze the impact of the capital flows on the economic growth. The change in the capital flows affects the money supply in the economy which in return influences the economic growth. The augmented dickey fuller test (ADF), descriptive Analysis, correlation method, and the auto regressive distribution lag are employed in this work. The ADF test is delved to examine the Stationarity of the variables and the correlation between them. The descriptive analysis is used to check the normality of the variable whether the variables is normally distributed or not. The survey bases on time series data ranging from the year 1974 to 2014. The variables as the gross domestic product (GDP), exchange rate (ER), inflation (INF), consumer price index (CPI), money supply (M2), total reserves (TR) and the foreign direct investment (FDI), price indices (PI). The research findings are Foreign direct investment, Exchange rate, Inflation rate, Consumer Price Index has the positive impact on the GDP while the Private Investment, Total reserves, and Money supply have the negative impact on the GDP. The value of the R square is 0.99874 which is very good. It means that the 99 percent variations exist in dependent variable due to independent variables.

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“…Similar to their last point, Frost () conducts a detailed review and evaluation of the criticisms that rating agencies faced particularly in the aftermath of the corporate accounting scandals of the early 2000s (such as Enron). Only recently, Lagner and zu Knyphausen‐Aufseß () have offered an extensive discussion of the literature on the role of credit rating agencies in relation to their different stakeholders. They conclude that “[t]he academic debate particularly missed to explore the impact of credit ratings on its stakeholders” (p. 186) and point to the influence of corporate ratings on companies’ strategic decisions as a highly relevant direction for future research.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Sovereign Credit Ratings on Corporations: A Literature Review and Research Recommendations

Nguyen¹,

Knyphausen‐Aufseß

2014

Financial Market

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During the financial crisis, sovereign ratings have come under increased public scrutiny due to their strong impact on sovereign borrowing costs and hence financial stability of countries. However, their influence on corporations within and outside the respective nations has so far attracted only limited attention, although several academics have provided intriguing insights in this regard. In order to obtain a structured overview of this relatively young strand of research, this paper reviews key insights and conclusions that the extant literature offers on the role of sovereign creditworthiness for corporations. Herein, it focuses on the effects that have been observed for the corporate business environment, access to capital, and foreign investment activities. Different research issues providing fertile ground for future studies are identified.

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Rating Agencies as Gatekeepers to the Capital Market: Practical Implications of 40 Years of Research

Cited by 14 publications

References 274 publications

The Role of Sovereign Ratings in M&A Markets: Empirical Evidence from Latin America and South East Asia

The Role of Sovereign Ratings in M&A Markets: Empirical Evidence from Latin America and South East Asia

Capital Flows and Money Supply: The Degree of Sterilization in Pakistan

The Impact of Sovereign Credit Ratings on Corporations: A Literature Review and Research Recommendations

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