Proceedings of the Fifth International Conference on Economic and Business Management (FEBM 2020)

Foreign Investment, Reputation and the Predictability of Chinese Credit Ratings

Authors
Xing-yue Zhan, Chao-hung Yu
Corresponding Author
Xing-yue Zhan
Available Online 14 December 2020.
DOI
10.2991/aebmr.k.201211.056How to use a DOI?
Keywords
Sino-foreign credit rating agencies, credit rating, rating adjustment, reputation effect
Abstract

This study examines how foreign investment in Chinese credit rating agencies affects the predictability of Chinese bond market ratings from January 1, 2013, to June 30, 2019. Empirical results show that the latest rating issued by both domestic and Sino-foreign rating agencies can reflect the probability of default, at least that of default in rating day. Furthermore, rating agencies with large market shares downgrade ratings to speculative grade near the day of default, even downgrading on the day of default. Reputation effects may prompt rating agencies in which foreign companies invest or with whom they cooperate to downgrade ratings sharply.

Copyright
© 2020, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the Fifth International Conference on Economic and Business Management (FEBM 2020)
Series
Advances in Economics, Business and Management Research
Publication Date
14 December 2020
ISBN
10.2991/aebmr.k.201211.056
ISSN
2352-5428
DOI
10.2991/aebmr.k.201211.056How to use a DOI?
Copyright
© 2020, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Xing-yue Zhan
AU  - Chao-hung Yu
PY  - 2020
DA  - 2020/12/14
TI  - Foreign Investment, Reputation and the Predictability of Chinese Credit Ratings
BT  - Proceedings of the Fifth International Conference on Economic and Business Management (FEBM 2020)
PB  - Atlantis Press
SP  - 333
EP  - 344
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.201211.056
DO  - 10.2991/aebmr.k.201211.056
ID  - Zhan2020
ER  -