scholarly journals Back to the Iron Cage? Institutional Isomorphism of the AIIB

2021 ◽  
Vol 16 (4) ◽  
pp. 7-29
Author(s):  
Jiejin Zhu ◽  
◽  
Xinyu Hu ◽  
Keyword(s):  
Credit Rating ◽  
Institutional Environment ◽  
Institutional Isomorphism ◽  
Institution Building ◽  
Investment Bank ◽  
Rating Agencies ◽  
Socialization Theory ◽  
Educational Backgrounds ◽  
International Credit ◽  
Belt And Road

During its first five years of operation, the Asian Infrastructure Investment Bank (AIIB) is becoming more and more similar to traditional Multilateral Development Banks (MDBs) in terms of operational goals, business area, and environmental and social standards. Why has the AIIB, the newest type of multilateral development bank (MDB) initiated by an emerging economy, undergone institutional isomorphism? Based on the socialization theory, this paper argues that the institutional environment in which the AIIB is operating has a strong influence on AIIB’s institution-building, mainly through the coercive, mimetic, and normative institutional isomorphic processes. On coercion, the pressures from European donors, international credit rating agencies, and global civil society have resulted in the AIIB’s institutional isomorphism. On mimicking, the social uncertainty of the relationship between the AIIB and the Belt and Road Initiative and the technical uncertainty of infrastructure projects have triggered the AIIB’s institutional isomorphism. On normativeness, the similar educational backgrounds and working experience of the AIIB’s staff and active interactions among the MDB family members have caused the AIIB’s institutional isomorphism. The paper concludes that the international institutional environment might hamper emerging economies’ capabilities of institutional innovation.

Are Transfer-Dependent Governments More Creditworthy? Reassessing the Fiscal Federal Foundations of Subnational Default Risk

2018 ◽  
Vol 50 (4) ◽  
pp. 1381-1403 ◽  
Author(s):  
Kyle Hanniman
Keyword(s):  
Default Risk ◽  
Credit Rating ◽  
Credit Ratings ◽  
Statistical Analyses ◽  
Credit Rating Agencies ◽  
Fiscal Discipline ◽  
Rating Agencies ◽  
International Credit ◽  
Fiscal Distress ◽  
Cross National

AbstractMany fiscal federal scholars argue, often implicitly, that transfer dependence generally bolsters subnational creditworthiness by signalling a higher likelihood of national bailouts for distressed governments. This article argues that dependence fails to bestow general benefits on local borrowers because it suggests an inability to generate additional revenues in the event of fiscal distress, and because this inability does not, contrary to the expectations of many, necessarily translate into higher bailout expectations. Ultimately it is the nature, not the level, of transfers that affects local creditworthiness, whether through bailout or non-bailout channels. Stable and predictable payments, including robust equalization systems, support local creditworthiness, while volatile and unpredictable transfers do not. The article supports these arguments with a review of documents issued by the major international credit rating agencies and cross-national statistical analyses of bailout probabilities and standalone credit ratings issued by Moody’s Investors Service. It also discusses the implications of the findings for work on the fiscal discipline of subnational governments.

“Aboard Our Development Train”

2021 ◽  
pp. 235-258
Author(s):  
Rush Doshi
Keyword(s):  
Credit Rating ◽  
Global Financial Crisis ◽  
Rating Agencies ◽  
The Core ◽  
Economic Statecraft ◽  
The Us ◽  
Regional Order ◽  
Belt And Road ◽  
Us Dollar ◽  
The Global Financial Crisis

Chapter 10 focuses on the economic and financial components of China’s grand strategy to build regional order. It argues that the Global Financial Crisis helped Beijing depart from a defensive blunting strategy that targeted American economic leverage to an offensive building strategy designed to build China’s own coercive and consensual economic capacities. At the core of this effort was China’s Belt and Road Initiative, its robust use of economic statecraft against its neighbors, and its attempts to gain greater financial influence through building or promoting alternatives to SWIFT messaging system, new credit-rating agencies, and the US dollar.

Investigation into Loan Default Problems in Infrastructure, Real Estate, and Constructions Sectors facing the New Generation Private Sector Banks in India

2014 ◽  
pp. 107-123 ◽  
Author(s):  
Rituparna Das
Keyword(s):  
Real Estate ◽  
Credit Rating ◽  
Economic Downturn ◽  
The Real Estate ◽  
Rating Agencies ◽  
International Credit ◽  
The Face ◽  
Loan Defaults ◽  
Investment Grade ◽  
New Generation

The rating agency Standard and Poor's recently warned that India could become the first of the BRIC economies to lose its investment-grade status because of the slowing down of growth prospect in the face of bad loans. Against the backdrop of the loan defaults in the real estate and infrastructure sectors leading to the slackening of economic growth, which caused downgradation of India's international credit rating, this chapter aims to inquire into the modus operandi of credit rating by banks and rating agencies, the impact of economic downturn on the behaviors of borrowers as well as lenders, mode of calculation of default probability, and the unaddressed needs of academic and professional research.

scholarly journals A motivation for banks in emerging economies to adapt agency ratings when assessing corporate credit

2019 ◽  
Vol 22 (1) ◽  
Author(s):  
Tanja Verster ◽  
Riaan De Jongh ◽  
Simon Greenberg ◽  
Erika Fourie ◽  
Dries De Wet
Keyword(s):  
South African ◽  
Credit Rating ◽  
Credit Ratings ◽  
Relevant Literature ◽  
Credit Rating Agencies ◽  
Rating Agencies ◽  
Corporate Credit ◽  
Standard And Poor's ◽  
International Credit ◽  
High Level

Background: This article considers whether South African banks should utilise the credit ratings provided by US-based credit rating agencies when assessing the creditworthiness of corporate borrowers.Aim: A review is conducted of the relevant literature and specifically the methodologies used by the credit rating agencies for ranking corporates in emerging markets.Setting: The three largest international credit rating agencies are Fitch Ratings, Moody’s Investor Services, and Standard and Poor’s. These agencies’ credit ratings cover the global spectrum of corporate, sovereign, financial and other public entities and the securities and obligations they issue. The analytical frameworks used to produce these ratings are referred to as credit rating methodologies.Method: A review of Moody’s ratings for South African corporate entities was undertaken to examine claims of a sovereign ceiling influencing the external ratings obtained by these institutions in emerging markets.Results: Only 14 of the 200 global South African ratings pierced the sovereign ceiling.Conclusion: The study concludes that the use of unmodified external ratings by banks to assess a corporate borrower should be discouraged. High-level suggestions are provided on how the methodologies and data used by the external agencies may rather be used to arrive at more suitable internal ratings.

scholarly journals Sovereign Rating Analysis through the Dominance-Based Rough Set Approach

2020 ◽  
Vol 45 (1) ◽  
pp. 3-16
Author(s):  
Ayrton Benedito Gaia Do Couto ◽  
Luiz Flavio Autran Monteiro Gomes
Keyword(s):  
Rough Set ◽  
Public Debt ◽  
Credit Rating ◽  
Investment Decisions ◽  
Rule Based ◽  
Rating Agencies ◽  
Credit Rating Agency ◽  
International Credit ◽  
Systems Learning ◽  
Training Examples

AbstractThe classifications of risk made by international rating agencies aim at guiding investors when it comes to the capacity and disposition of the evaluated countries to honor their public debt commitments. In this study, the analysis of economic variables of sovereign rating, in a context of vagueness and uncertainty, leads the inference of patterns (multi-criteria rules) by following the Dominance-based Rough Set Approach (DRSA). The discovery of patterns in data may be useful for subsidizing foreign investment decisions in countries; and this knowledge base may be used in rule-based expert systems (learning from training examples).The present study seeks to complement the analysis produced by an international credit rating agency, Standard & Poor’s (S&P), for the year 2018.

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