scholarly journals The determinants of issuers’ long term credit ratings : American S&P500 index

2015 ◽  
Vol 3 (1) ◽  
pp. 78
Author(s):  
ِِAfef Feki Krichene ◽  
Walid Khoufi
Keyword(s):  
Credit Rating ◽  
Credit Ratings ◽  
Probit Model ◽  
Ordered Probit ◽  
Ordered Probit Model ◽  
Financial Policy ◽  
Significant Determinant ◽  
Short Term ◽  
The Impact

<p>In this paper, we examine the impact that various financial and business profile variables have on credit ratings issued for the S&amp;P500 firms by Moody’s. Our ordered probit model indicates that firms’ financial policy, size, liquidity, interest and debt coverage have the most pronounced effect on credit ratings. Our results show that different coefficients are associated to the increments of interest and debt coverage ratios. Business profile variables are not significant. Liquidity variable is also a significant determinant of the issuer long-term credit rating and not just the short term one.</p>

scholarly journals Wpływ COVID-19 na nastawienie i credit ratingi krajów

2020 ◽  
Vol 8 (4) ◽  
pp. 535-564
Author(s):  
Patrycja Chodnicka-Jaworska
Keyword(s):  
Financial Crisis ◽  
Foreign Currency ◽  
Credit Rating ◽  
Credit Ratings ◽  
Short Term ◽  
Rating Agencies ◽  
Thomson Reuters ◽  
The Impact ◽  
The International Monetary Fund

Covid-19 Impact on Countires’ Outlooks and Credit Ratings The aim of the study is to examine the impact of the financial crisis caused by COVID-19 on chang­es in outlooks and credit ratings of major rating agencies. The research hypothesis was as follows: the financial crisis caused by COVID-19 negatively affected the change in outlooks and credit ratings of countries. The study used long-term and short-term credit ratings and outlooks collected from the Thomson Reuters / Refinitiv database regarding liabilities expressed in foreign currency and macroeconomic data from the International Monetary Fund databases, for 2010–2021. The analysis was carried out using ordered logit panel models. The presented results showed a weak significant im­pact of the COVID-19 pandemic on credit rating. The agency that changed its notes in connection with this situation is Standard & Poor’s (S&P). However, the attitude responded to the situation un­der investigation. During the crisis, country ratings have become less sensitive to growing debt, which may be dictated by widespread loosening of fiscal policy. The rate of GDP growth has a par­ticular impact during the COVID-19 period in the event of a change of outlook. Rising inflation is particularly dangerous in the age of pandemics. It may be related to monetary policy easing.

Financing and supervisory effects of credit ratings: evidence from mergers and acquisitions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qian Xu ◽  
Yuhui Wu ◽  
Lingling Zhai
Keyword(s):  
Credit Rating ◽  
Credit Ratings ◽  
Probit Model ◽  
Economic Consequences ◽  
Financial Behavior ◽  
Content Type ◽  
Emerging Capital Markets ◽  
The Impact

Purpose The purpose of this paper is to examine how credit ratings affect corporate financial behavior from the perspective of merger and acquisition (M&A) decisions. The goal is to test the financing and supervisory effects of credit ratings and study the economic consequences of credit ratings in the context of China. Design/methodology/approach Using a sample of Chinese A-share listed companies over the 2008–2017 period, this paper empirically examines the effect of credit ratings on firms’ M&A decisions. The authors used a probit model for regression when they tested the effect of credit rating on M&A likelihood and a tobit model when they tested the effect of credit rating on M&A intensity. Findings First, rated enterprises tend to make more acquisitions compared with non-rated enterprises, consistent with the hypothesis that credit ratings alleviate financing constraints. Second, high-rated enterprises are more cautious toward M&As due to concerns about preserving their ratings, which indicates that credit ratings also play a supervisory role in the M&A process. Additional tests show that enterprises reduce M&A activity after a rating downgrade to avoid further deterioration in their ratings; this further supports the supervisory role of credit ratings. Originality/value This paper adds incremental evidence to the literature on the impact of credit ratings on corporate financial behavior and extends the literature on the factors influencing M&As. The authors provided empirical evidence from emerging capital markets for the financing and supervisory effects of credit ratings and provided theoretical guidance for promoting the stable, long-term development of China’s credit rating industry.

scholarly journals Credit Rating Downgrades and Sudden Stops of Capital Flows in the Eurozone

2017 ◽  
Vol 08 (03) ◽  
pp. 1750016 ◽  
Author(s):  
Stefanos Ioannou
Keyword(s):  
Credit Rating ◽  
Probit Model ◽  
Capital Inflows ◽  
Sudden Stops ◽  
Qualitative Aspect ◽  
Short Term ◽  
Capital Movements ◽  
The Impact ◽  
Rating Downgrades

The current paper investigates the impact of sovereign ratings on sudden stops of capital in the context of the Eurozone. Our analysis focuses on the qualitative aspect of ratings on the hypothesis that such aspect has a concrete impact on capital movements. A panel probit model is utilized for our purposes. We distinguish between net and gross capital inflows, while we also draw a distinction between long-term and short-term oriented capital. Our results confirm the influence of sovereign ratings for the majority of our model specifications. They also appear to be most significant in the case of short-term flows.

Does Happiness Adapt to Increase in Income? Evidence from Pakistan Socio-economic Survey (1998-2001)

2016 ◽  
Vol 55 (2) ◽  
pp. 113-122 ◽  
Author(s):  
Hamid Hasan
Keyword(s):  
Random Effect ◽  
Probit Model ◽  
Jel Classification ◽  
Policy Implications ◽  
Ordered Probit ◽  
Ordered Probit Model ◽  
Short Term ◽  
Hedonic Adaptation ◽  
Short Period ◽  
Economic Survey

The fact that happiness does not increase as income increases over time [the Easterlin Paradox (1974)] has puzzled a number of scholars for a number of decades. The latest research on this topic [Easterlin, et al. (2010)] concludes that happiness increases with an increment in income in the short term but it adapts to this income increment in the long term. The objective of this research is to test whether happiness adapts to income increase in the short term using two-period panel Pakistan Socio-Economic Survey [PSES (1998-2001)]. The paper makes use of a unique question on happiness asked in PSES to resolve two issues simultaneously: unavailability of happiness question in period 1 and potential inconsistency of responses to general happiness question. The paper applies Random Effect Ordered Probit model to investigate the hedonic adaptation effect using various formulations used in the happiness economics literature. The results show positive and statistically significant impact of income change on happiness with weak evidence of adaptation to income since it is statistically insignificant. The result is consistent with the studies that show no adaptation during a short period. Among several reasons for hedonic adaptation, falling positive emotions and rising aspirations are discussed along with causes of happiness and policy implications. The significance of the present research lies in the fact that it is the first study in Pakistan that tests the hedonic adaptation to income and hence contributes to the evidence on happiness dynamics. JEL Classification: I31, D60, C25 Keywords: Happiness, Adaptation, Income, Panel Ordered Probit Model

scholarly journals Corporate Board Attributes, Shariah Board Attributes and Credit Rating: Evidence from Islamic Banks of Pakistan

10.26414/a090 ◽  
2021 ◽  
Vol 8 (1) ◽  
pp. 19-34
Author(s):  
Muhammad Mansoor ◽  
Nazima Ellahi ◽  
Qaiser Ali Malik
Keyword(s):  
Financial Institutions ◽  
Credit Rating ◽  
Rating Scale ◽  
Credit Ratings ◽  
Islamic Banks ◽  
Corporate Board ◽  
Short Term ◽  
Rating Agencies ◽  
Shariah Governance

Shariah Governance is an essential characteristic that differentiates Islamic financial institutions from Conventional financial institutions. The study’s purpose is to explore the effect of corporate governance attributes and Shariah board attributes on the long term and short-term credit rating of Islamic banks in Pakistan. The study develops six different models based on corporate board characteristics, Shariah board attributes and credit ratings, and collected data from annual reports of Pakistani Islamic banks for the period 2013- 2019. This study used Long term credit rating scale used by Grassa (2016) and, Ashbaugh-Skaife, Collins, and LaFond (2006), and developed a Short term credit rating scale. The study applied descriptive statistics, correlations and ordered logit regression. The results confirmed that corporate governance and Shariah governance attributes are significantly associated with the long term and short-term credit ratings of Islamic banks. The study concludes that credit rating agencies in Pakistan i.e. PACRA and JC-VIS, and other international credit rating agencies including Fitch, Moody and Standard & Poor’s must consider Shariah governance attributes as key determinants while assigning long term and short term credit ratings to Islamic banks.

scholarly journals Satisfaction Evaluation of Milk Handlers by Southern U.S. Dairy Farmers

1996 ◽  
Vol 28 (2) ◽  
pp. 313-321 ◽  
Author(s):  
Dave M. Sayers ◽  
Richard L. Kilmer ◽  
Jonq-Ying Lee ◽  
Anouk M. Flambert
Keyword(s):  
Quality Of Service ◽  
Probit Model ◽  
Ordered Probit ◽  
Ordered Probit Model ◽  
Dairy Farmers ◽  
Choice Satisfaction ◽  
Satisfaction Evaluation ◽  
The Impact ◽  
Positive Effect

AbstractAn ordered probit model is used to investigate the factors that determine post-choice satisfaction of southeastern U.S. dairy farmers with their milk handlers. The impact on farmer satisfaction of milk handler attributes, farm/farmer characteristics, and farm location is tested. Results support the hypothesis that mailbox price and the quality of service provided by milk handlers have a positive effect on satisfaction levels. Bargaining-operating cooperatives are negatively associated with farmer satisfaction when contrasted against independently owned milk handlers and bargaining-only cooperatives. Choice and the ability to switch milk handlers are also important determinants of farmer satisfaction.

scholarly journals An Application of Panel Ordered Probit Model to Credit Scoring

2018 ◽  
Author(s):  
Ebru Çağlayan Akay ◽  
Zamira Oskonbaeva
Keyword(s):  
Gross Domestic Product ◽  
Credit Scoring ◽  
Probit Model ◽  
Ordered Probit ◽  
Domestic Product ◽  
Ordered Probit Model ◽  
Annual Data ◽  
Sovereign Credit Ratings ◽  
Macroeconomic Indicators ◽  
The Impact

Ratings are important in attracting foreign capital so they play a great role in the financial system of a country. The aim of the study is to investigate the impact of macroeconomic indicators on sovereign credit ratings assigned by Fitch. For this aim Panel ordered probit model was applied to the annual data from 2000 to 2011. The analysis rests on panel of 44 countries. According to the results obtained it can be concluded that gross domestic product growth rate , per capita gross domestic product, unemployment, export, default history and the level of economic development significantly affect ratings.

scholarly journals Exploring injury severity of pedestrian-vehicle crashes at intersections: unbalanced panel mixed ordered probit model

2021 ◽  
Vol 13 (1) ◽  
Author(s):  
Željko Šarić ◽  
Xuecai Xu ◽  
Daiquan Xiao ◽  
Joso Vrkljan
Keyword(s):  
Goodness Of Fit ◽  
Injury Severity ◽  
Random Parameter ◽  
Probit Model ◽  
Ordered Probit ◽  
Ordered Probit Model ◽  
Vehicle Crashes ◽  
Proposed Model ◽  
Unobserved Effects ◽  
The Impact

AbstractAlthough the pedestrian deaths have been declining in recent years, the pedestrian-vehicle death rate in Croatia is still pretty high. This study intended to explore the injury severity of pedestrian-vehicle crashes with panel mixed ordered probit model and identify the influencing factors at intersections. To achieve this objective, the data were collected from Ministry of the Interior, Republic of Croatia from 2015 to 2018. Compared to the equivalent random-effects and random parameter ordered probit models, the proposed model showed better performance on goodness-of-fit, while capturing the impact of exogenous variables to vary among the intersections, as well as accommodating the heterogeneity issue due to unobserved effects. Results revealed that the proposed model can be considered as an alternative to deal with the heterogeneity issue and to decide the factor determinants. The results may provide beneficial insight for reducing the injury severity of pedestrian-vehicle crashes.

CREDIT RATING AND BANK BEHAVIOUR IN INDIA: POSSIBLE IMPLICATIONS OF THE NEW BASEL ACCORD

2004 ◽  
Vol 49 (01) ◽  
pp. 37-54 ◽  
Author(s):  
D. M. NACHANE ◽  
SAIBAL GHOSH
Keyword(s):  
Credit Rating ◽  
Multinomial Logit Model ◽  
Capital Adequacy ◽  
Short Term ◽  
Basel Accord ◽  
Explanatory Variables ◽  
Capital Adequacy Ratio ◽  
Indian State ◽  
The Impact

The paper examines the impact of credit rating on capital adequacy ratios of Indian state-owned banks using quarterly data for the period 1997:1 to 2002:4. To this end, a multinomial logit model with multi credit rating indicators as dependent variable is estimated. The variables that can impinge upon capital adequacy ratio have been used as explanatory variables. Two separate models — one for long-term credit rating and another for short-term credit rating — have been estimated. The paper concludes that, both for short-term as well as for long-term ratings, capital adequacy ratios are an important factor impinging on credit rating of Indian state-owned banks.

Credit ratings and audit opinion: evidence from Tunisia

2019 ◽  
Vol 9 (1) ◽  
pp. 103-125 ◽  
Author(s):  
Hanen Moalla ◽  
Rahma Baili
Keyword(s):  
Credit Rating ◽  
Credit Ratings ◽  
Developed Countries ◽  
Short Term ◽  
Content Type ◽  
Audit Opinion ◽  
Going Concern Opinion ◽  
To Receive ◽  
The Relationship

Purpose The purpose of this paper is to examine whether credit ratings issued by Fitch predict auditor’s opinion for the Tunisian financial companies. It studies the association between Fitch’s credit rating and the audit opinion. Design/methodology/approach The whole population was analyzed. It is composed of 35 banks, leasing companies and factoring companies in Tunisia. The hand-collected data over 11 years (2005–2015) were used and a multiple-ordered logistic regression was performed. Findings The findings show that firms with a high short-term grade, a high long-term grade or a positive outlook are more likely to receive an unqualified audit opinion. In addition, companies with a stable outlook are more likely to receive an explanatory paragraph, a qualification or a going-concern opinion. Originality/value Studies examining the relationship between credit ratings and audit opinion are rare. This piece of research adds to knowledge about the relationship between different components of agency ratings and the auditor’s opinion in a developing country. Previous studies have investigated the case of developed countries and have been interested in the only impact of the long-term credit rating. This study analyzes three components of credit rating, namely long-term credit rating, short-term credit rating and rating outlook. In addition, it sheds light on the effect of various rating grades issued by rating agencies on the audit opinion. It gives a broader view of the relationship between credit ratings and audit opinion.

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