Are inflated domestic credit ratings relative to global ratings associated with peer firms’ investment decisions? Evidence from Korea

This study examines the influence of peer firms on a firm’s investment policy in Pakistan during the period 2001–2017. It also investigates the heterogeneity in peer effects by taking into account a firm’s age and its leadership role in the industry. The system-GMM estimation results suggest that peer firms significantly influence a firm’s investments on both tangible and intangible assets. Yet, peer effects are more pronounced for tangible investment. We also observe that young firms are more prone to imitate the investment decisions of their industry peers. However, the findings indicate that mimicking is not a tactical behaviour for industry leader firms. These findings have important implications for both the firm management and the owner community.

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Do Credit Ratings Take into Account the Sustainability Performance of Companies?

Sustainability ◽

10.3390/su10114272 ◽

2018 ◽

Vol 10 (11) ◽

pp. 4272 ◽

Cited By ~ 5

Author(s):

Maite Cubas-Díaz ◽

Miguel Martínez Sedano

Keyword(s):

Fixed Effects ◽

Credit Rating ◽

Explanatory Variable ◽

Credit Ratings ◽

Investment Decisions ◽

Probit Analysis ◽

Important Indicator ◽

Sustainability Performance ◽

Dependent Variables ◽

Consistent Performance

In the last few decades, sustainability performance measuring has become a widely-studied issue, and various measurement proposals have been put forward. However, it is also important to know whether those measures are actually being used in the real world. In this case, we take one very important indicator used by investors when they make investment decisions: the credit rating of the potential investment. We test whether credit ratings take into account the above-mentioned measures. Following the literature, we conduct a fixed-effects ordered probit analysis, using as controls the variables usually found in the related literature on credit rating analysis. The dependent variables are S&P ratings. We find that companies with higher sustainability performance tend to have higher credit ratings, though having a less consistent performance over time seems to have no effect. To check the robustness of our results, we also perform the analysis for different sectors and sub-periods. In addition, we conduct the analysis using sustainability scores provided by ASSET4 (Datastream) as an explanatory variable and using Fitch credit ratings as the explained variable.

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Corporate risk-taking with long-term, short-term and subordinate credit ratings

International Journal of Managerial Finance ◽

10.1108/ijmf-02-2021-0118 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Dror Parnes

Keyword(s):

Risk Taking ◽

Design Methodology ◽

Credit Ratings ◽

Short Term ◽

Content Type ◽

Interaction Terms ◽

Domestic Credit ◽

Lag Variables ◽

Corporate Risk

PurposeThis study empirically examines, from the first quarter of 1981 until the fourth quarter of 2017, the relations across customary domestic issuer credit ratings (long-term, short-term and subordinate) and three popular corporate risk-taking measurements (the variability of operating profitability, net profitability, and research and development expenses).Design/methodology/approachThe author deploys categorical regressions and robustness tests with control variables, interaction terms, fixed effect variables, lag variables and delta variables.FindingsThe author documents that both short-term and subordinate domestic credit ratings are key determinants of the volatility of operating profitability. The author also identifies long-term credit ratings as secondary factors, yet they do affect broader corporate risk-taking behavioral features (along all three measurements). Furthermore, the author finds that the higher (lower) the credit ratings assigned, i.e. the superior (inferior) the credit quality externally judged, the more (less) overall risk firms tend to undertake.Originality/valueIt is the first research to examine both the inclusive influence and the granular effects of credit ratings on corporate risk-taking (CRT) behavior. It is also the only enquiry to inspect the specific relationships along three types of domestic issuer credit ratings: long-term, short-term and subordinate ratings.

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The Effects of Restatements for Misreporting on Auditor Scrutiny of Peer Firms

Accounting Horizons ◽

10.2308/acch-51934 ◽

2017 ◽

Vol 32 (1) ◽

pp. 65-85 ◽

Cited By ~ 8

Author(s):

Feng Guo ◽

Thomas R. Kubick ◽

Adi Masli

Keyword(s):

Internal Control ◽

Spillover Effect ◽

Investment Decisions ◽

Audit Fees ◽

Shareholder Wealth ◽

Data Availability ◽

Market Reactions ◽

Control Quality ◽

Peer Firms ◽

Financial Misreporting

SYNOPSIS Prior research contends that financial misreporting has a spillover effect on the outcomes of peer firms within the same industry through investment decisions, information risk, and shareholder wealth. We predict and confirm a higher level of audit fees for peer firms when serious misreporting by other firms is announced in the industry. We find this effect is limited to peers that exhibit poor internal control quality. In addition, we observe higher audit fees for peers of industry prominent misreporting firms and for peers of firms announcing restatements with larger negative market reactions. Overall, our results suggest that financial misreporting in the industry has a spillover effect on audit fees of non-misreporting peer firms. Data Availability: All data are from public sources identified in the manuscript.

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Credit Ratings and Corporate Investment Decisions

Korean Journal of Financial Studies ◽

10.26845/kjfs.2017.09.46.4.785 ◽

2017 ◽

Vol 46 (4) ◽

pp. 785-807

Author(s):

Taekyu Kim ◽

Jungsoon Shin

Keyword(s):

Credit Ratings ◽

Investment Decisions ◽

Corporate Investment

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Standard setting in an objective structured clinical examination: use of global ratings of borderline performance to determine the passing score

Medical Education ◽

10.1046/j.1365-2923.2001.01041.x ◽

2001 ◽

Vol 35 (11) ◽

pp. 1043-1049 ◽

Cited By ~ 58

Author(s):

Tim J Wilkinson ◽

David I Newble ◽

Christopher M Frampton

Keyword(s):

Clinical Examination ◽

Standard Setting ◽

Objective Structured Clinical Examination ◽

Global Ratings ◽

Passing Score

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External Validity of SCORS-G Ratings of Thematic Apperception Test Narratives in a Sample of Outpatients and Inpatients

Rorschachiana Journal of the International Society for the Rorschach ◽

10.1027/1192-5604/a000057 ◽

2015 ◽

Vol 36 (1) ◽

pp. 58-81 ◽

Cited By ~ 10

Author(s):

Michelle B. Stein ◽

Jenelle Slavin-Mulford ◽

Caleb J. Siefert ◽

Samuel Justin Sinclair ◽

Michaela Smith ◽

...

Keyword(s):

Life Events ◽

Psychiatric Hospitalization ◽

Clinical Care ◽

Thematic Apperception Test ◽

Clinical Samples ◽

Cross Sectional ◽

Conduct Disordered ◽

Global Ratings ◽

Thematic Apperception ◽

History Of

Abstract. The Social Cognition and Object Relations Scale-Global Ratings Method (SCORS-G; Stein, Hilsenroth, Slavin-Mulford, & Pinsker-Aspen, 2011 ) is a reliable system for coding narrative data, such as Thematic Apperception Test (TAT) stories. This study employs a cross-sectional, correlational design to examine associations between SCORS-G dimensions and life events in two clinical samples. Samples were composed of 177 outpatients and 57 inpatients who completed TAT protocols as part of routine clinical care. Two experienced raters coded narratives with the SCORS-G. Data on the following clinically relevant life events were collected: history of psychiatric hospitalization, suicidality, self-harming behavior, drug/alcohol abuse, conduct-disordered behavior, trauma, and education level. As expected, the clinical life event variable associated with the largest number of SCORS-G dimensions was Suicidality. Identity and Coherence of Self was related to self-harm history across samples. Emotional Investment in Relationships and Complexity of Representations were also associated with several life events. Clinical applications, limitations of the study, and future directions are reviewed.

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