scholarly journals Is Bigger Better? The Impact of the Size of Banks on Credit Ratings

e-Finanse ◽  
2020 ◽  
Vol 16 (2) ◽  
pp. 24-36
Author(s):  
Patrycja Chodnicka-Jaworska
Keyword(s):  
Credit Ratings ◽  
Capital Adequacy ◽  
Panel Data Models ◽  
Management Quality ◽  
Financial Conditions ◽  
Thomson Reuters ◽  
Dependent Variables ◽  
European Banks ◽  
The Impact

Abstract The aim of the paper was to analyse the factors influencing European banks’ credit ratings by taking into account the size of these institutions. A literature review onthe indicators that can impact bank notes has been made. As a result, the following hypotheses have beendrawn:banks’ capital adequacy, profitability, liquidity and management quality have a significant influence on bank credit ratings. Bigger banks receive higher credit ratings than the smaller ones in similar financial conditions. To verify the presented hypotheses ordered logit panel data models have been used. The analysis has been prepared by using the quarterly data from the Thomson Reuters database for the period between 1998 to 2015. The European banks’ long-term issuer credit ratings proposed by S&P, Fitch and Moody are used as dependent variables. The sample has been divided into subsamples according to the size of a bank andbanking sector and capitalization.

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.

scholarly journals The Long-Term and Geographically Constrained Effects of Campaign Advertising on Political Polarization and Sorting

2017 ◽  
Vol 46 (1) ◽  
pp. 3-25 ◽  
Author(s):  
Travis N. Ridout ◽  
Erika Franklin Fowler ◽  
Michael M. Franz ◽  
Kenneth Goldstein
Keyword(s):  
Political Advertising ◽  
Political Polarization ◽  
Political Elites ◽  
The Past ◽  
Mass Public ◽  
Dependent Variables ◽  
Media Markets ◽  
The Impact ◽  
Campaign Advertising

Scholars agree that there has been an increase in polarization among political elites, though there continues to be debate on the extent to which polarization exists among the mass public. Still, there is general agreement that the American public has become more sorted over the past two decades, a time during which political ad volumes have increased and ads have become more negative. In this research, we explore whether there is a link between the two. We take advantage of variation in the volume and tone of political advertising across media markets to examine the link between advertising and three dependent variables: issue polarization, affective polarization, and sorting. We focus on the impact of both recent ad exposure and cumulative ad exposure across several election cycles. Ultimately, we find little impact of advertising on polarization or sorting, both overall and among subgroups of the population.

scholarly journals Determinants Of European Banks' Capital Adequacy

2015 ◽  
Vol 18 (4) ◽  
pp. 81-98 ◽  
Author(s):  
Emilia Klepczarek
Keyword(s):  
Deposit Insurance ◽  
Subject Area ◽  
Capital Adequacy ◽  
Risk Indicators ◽  
Stress Tests ◽  
Factors Affecting ◽  
Deposit Insurance System ◽  
Tier 1 ◽  
European Banks ◽  
The Impact

This paper examines the factors affecting the Common Equity Tier 1 Ratio (CET1), which is a measure of the relationship between core capital and the risk-weighted assets of banks. The research is based on a randomly selected sample from the group of banks examined by the European Central Bank authorities. The ECB conducted stress tests assessing the CET1 Ratio with respect to the Basel III regulations. The findings confirm the hypothesis about the impact of bank size and the risk indicators (risk-weight assets to total assets ratio and the share of loans in total assets) on banks’ capital adequacy. They also confirm strong effect of competitive pressure and the negative correlation between the CET1 Ratio and the share of deposits in non-equity liabilities, which may be explained by the existence of the deposit insurance system. Finally the paper presents the limitations of the study and conclusions regarding possible further research in this subject area.

scholarly journals Impact Of Firm Specific Factors On Capital Structure Decision: An Empirical Study Of Albanian Firms.

2013 ◽  
Vol 2 (4) ◽  
pp. 135 ◽  
Author(s):  
Anila Çekrezi
Keyword(s):  
Capital Structure ◽  
Return On Assets ◽  
Balance Sheets ◽  
Listed Firms ◽  
Natural Logarithm ◽  
Total Debt ◽  
Dependent Variables ◽  
Specific Factors ◽  
The Impact

This paper attempts to explore the impact of firm specific factors on capital structuredecision for a sample of 65 non- listed firms, which operate in Albania, over the period2008-2011.In this paper are used three capital structure measures ; short –term debt tototal assets (STDA), long- term debt to total assets (LTDA) and total debt to total assets(TDTA) as dependent variables and four dependent variables: tangibility(TANG),liquidity (LIQ), profitability(ROA=return on assets) and size (SIZE). The investigationuses panel data procedure and the data are taken from balance sheets and include onlyaccounting measures on the firm’s leverage. This study found that tangibility (the ratio offixed assets to total assets), liquidity (the ratio of current assets to current liabilities)profitability (the ratio of earnings after taxes to total assets) and size (natural logarithm oftotal assets) have a significant impact on leverage. Also empirical evidence reveals asignificant negative relation of ROA to leverage and a significant positive relation ofSIZE to leverage. And the second objective of this study is to identify the impact ofindustry classification on firm’s leverage, using a dummy variable for the trade sector. Soone of the hypothesis tested is if financial leverage is independent of industryclassification. Results reveal that long term debt to total assets and total debt to totalassets ratios are significantly different across Albanian industries.

scholarly journals Impact of CEO pensions on value relevance of R&D expenditures

2018 ◽  
Vol 16 (4) ◽  
pp. 224-234
Author(s):  
Kyung Jin Park ◽  
Kyoungwon Mo
Keyword(s):  
Firm Value ◽  
Default Risk ◽  
Value Relevance ◽  
Least Square ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Dependent Variables ◽  
Unfunded Liabilities ◽  
The Impact

Since CEO pension is unsecured and unfunded liabilities of the firm, it induces CEOs to have long-term incentives towards minimizing their firms’ default risk. Motivated by the unique characteristics of CEO pension, this study investigates the impact of CEO pension on the value relevance of R&D expenditures. Using Tobin’s Q ratio to measure firm value, the empirical results show that CEO pension intensifies the relation between R&D expenditures and Tobin’s Q ratio. The results remain robust in two-stage least square and propensity score matching regression analysis to address the endogeneity issues in the relation between CEO pension and the value relevance of R&D expenditures. In addition, the regression results with ROA and F-score as the alternative dependent variables also confirm that CEO pension intensifies the relation between R&D expenditures and firm value.

Does corporate sustainability impact firm profitability? Evidence from India

2018 ◽  
Vol 56 (8) ◽  
pp. 1734-1747 ◽  
Author(s):  
Shernaz Bodhanwala ◽  
Ruzbeh Bodhanwala
Keyword(s):  
Empirical Evidence ◽  
Developing Economies ◽  
Corporate Sustainability ◽  
Empirical Support ◽  
Policy Formulation ◽  
Content Type ◽  
Thomson Reuters ◽  
Firm Profitability ◽  
The Impact

Purpose The purpose of this paper is to study whether corporate sustainability impacts profitability performance. Design/methodology/approach The sample under study consists of 58 Indian firms that are consistently a part of Thomson Reuters Asset 4 ESG database. An empirical multivariate panel data model is developed to analyse the impact of sustainability (environmental, social and governance) on firm profitability. Further, the study seeks to understand whether firms ranked high on sustainability parameters perform better compared to low-ranked firms. This has been tested by applying parametric t-test. Findings The study reveals a significant positive relationship between sustainability and firm performance measures (return on invested capital, return on equity, return on assets and earnings per share). Empirical evidence suggests that firms that practice remarkable sustainable development strategies report higher profitability and have substantially low gearing level. Research limitations/implications This study provides empirical support for the practitioners, policy makers and academicians emphasising strongly on the role played by deployment of sustainable environmental, social and governance efforts in enabling firms to achieve the profit maximisation objective. In the long term, strategies that take sustainability criteria into account have the capacity to create long-term value and provide firms with competitive advantage. The findings provide impetus to many mid- and large-capitalised Indian firms to initiate the adoption of sustainable measures in business policy formulation. The market valuation perception on sustainability practices followed by Indian firms leaves scope for future research. Originality/value Empirical evidence on the link between sustained sustainability efforts by corporates and their profitability from a developing nation context is limited. This paper provides much-needed evidence in the area of sustainability performance from India – one of the largest, rapidly developing economies in the world.

The Risk of Insolvency and its Impact on Romanian Banks

2016 ◽  
Vol 7 (2) ◽  
pp. 97-104
Author(s):  
Elena Violeta Drăgoi ◽  
Larisa Elena Preda
Keyword(s):  
Sustainable Development ◽  
Banking System ◽  
Capital Adequacy ◽  
Beneficial Effects ◽  
The Stability ◽  
The Impact

Abstract The new regulations on capital adequacy aimed to strengthen the stability of financial and banking system because a stable banking system contributes to assure a sustainable development with long term beneficial effects on economy. This article represents a review of the impact on new higher standards for Romanian banks regarding capital adequacy.

scholarly journals TESTING THE IMPACT OF QUARTERLY RESULTS AND ANALYSTS’ EXPECTATIONS ON PRICES OF SELECTED EQUITIES

2012 ◽  
Vol 10 (2) ◽  
pp. 159-173
Author(s):  
Viktor Šoltés
Keyword(s):  
Linear Regression ◽  
Stock Returns ◽  
Share Price ◽  
Independent Variables ◽  
Market Index ◽  
Thomson Reuters ◽  
Impact Measure ◽  
The Impact ◽  
The Relationship

The aim of the article is to find the relationship between the growth and decline in the share price during the promulgation period of quarterly results of companies and surprise, either positive or negative in the quarterly results. Quarterly results are compared with the forecasts of analysts who publish their forecasts for quarterly results at Thomson Reuters and Bloomberg. Relationship is confirmed statistically, where stock returns in the period is the dependent variable, independent variables are three – return of the corresponding market index, excess impact – measure of surprise in quarterly results in comparison with analysts’ estimates and VIX index. Linear regression is used for testing of return and GARCH model is used for testing of volatility, there is focus on adaptation of actual volatility to the long-term average volatility after accidental shock.

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.

scholarly journals The Impact of Stronger Shareholder Control on Bondholders

2020 ◽  
pp. 1-37 ◽  
Author(s):  
Sadra Amiri-Moghadam ◽  
Siamak Javadi ◽  
Mahdi Rastad
Keyword(s):  
Credit Ratings ◽  
Operating Performance ◽  
Credit Default Swap ◽  
Direct Benefit ◽  
Managerial Entrenchment ◽  
Credit Default ◽  
The Impact ◽  
Swap Spreads ◽  
Positive Effect

Abstract We study the impact of stronger shareholder control on bondholders. We find that the passage of shareholder-sponsored governance proposals causes a decline in credit default swap spreads, indicating a net positive effect on bondholders. Evidence suggests that the direct benefit of stronger shareholder control, through the “management disciplining” channel, is larger than the combined adverse effects of directly escalating shareholder-bondholder conflict and indirectly exacerbating exposure to shareholder opportunism. Results are stronger for firms with existing high levels of shareholder-bondholder conflict and for proposals that mitigate managerial entrenchment without exacerbating risk-shifting. Finally, stronger shareholder control improves credit ratings and operating performance in the long-term.

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