Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/81900
Title: Does Increased Competition Affect Credit Ratings? A Reexamination of the Effect of Fitch’s Market Share on Credit Ratings in the Corporate Bond Market
Authors: Bae, Kee-Hong
Kang, Jun-Koo
Wang, Jin
Keywords: Financial and Quantitative Analysis
Issue Date: 2015
Source: Bae, K.-H., Kang, J.-K., & Wang, J. (2015). Does Increased Competition Affect Credit Ratings? A Reexamination of the Effect of Fitch’s Market Share on Credit Ratings in the Corporate Bond Market. Journal of Financial and Quantitative Analysis, 50(05), 1011-1035.
Series/Report no.: Journal of Financial and Quantitative Analysis
Abstract: We examine two competing views regarding the impact of competition among credit rating agencies on rating quality: the view that rating agencies do not sacrifice their reputation by inflating firm ratings, and the view that competition among rating agencies arising from the conflict of interest inherent in an “issuer pay” model creates pressure to inflate ratings. Using Fitch’s market share as a measure of competition among rating agencies and controlling for the endogeneity problem caused by unobservable industry effects, we find no relation between Fitch’s market share and ratings, suggesting that competition does not lead to rating inflation.
URI: https://hdl.handle.net/10356/81900
http://hdl.handle.net/10220/39688
ISSN: 0022-1090
DOI: 10.1017/S0022109015000472
Schools: Nanyang Business School 
Rights: © 2015 Michael G. Foster School of Business, University of Washington. This paper was published in Journal of Financial and Quantitative Analysis and is made available as an electronic reprint (preprint) with permission of Michael G. Foster School of Business, University of Washington. The published version is available at: [http://dx.doi.org/10.1017/S0022109015000472]. One print or electronic copy may be made for personal use only. Systematic or multiple reproduction, distribution to multiple locations via electronic or other means, duplication of any material in this paper for a fee or for commercial purposes, or modification of the content of the paper is prohibited and is subject to penalties under law.
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Journal Articles

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