Eleimon Gonis
The rating decision and the determinants of credit ratings: A UK empirical investigation
Gonis, Eleimon; Paul, Salima; Wilson, Nicholas
Authors
Salima Paul
Nicholas Wilson
Abstract
This study examines the determinants of the decision of UK non-financial companies to solicit a credit rating drawing upon the information asymmetry, signalling, agency and default literature. The paper extends the current literature on the determinants of corporate credit ratings by including key non-financial variables. The rating likelihood models are able to distinguish between rated and non-rated companies satisfactorily. Moreover, the estimated rating determinants models reveal that the inclusion of non-financial variables adds to their explanatory power. Finally, the study examines whether the unique attributes shared by rated companies drive their decision to solicit a credit rating. Using a two-stage sample selection framework the results indicate that self-selection is not dominant among UK non-financial companies.
Journal Article Type | Article |
---|---|
Publicly Available Date | Jun 8, 2019 |
Peer Reviewed | Peer Reviewed |
Keywords | credit ratings, rating determinants, rating likelihood, sample selection, self selection, probit, ordered probit |
Public URL | https://uwe-repository.worktribe.com/output/950396 |
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