Can the dual-rating regulation improve the rating quality of Chinese corporate bonds?

We developed a dual-reputational rating shopping model to introduce public and institutional reputations. Investor’s and regulator’s penalty rates are described as public and institutional reputations, respectively. We achieved the available conditions of single-rating and dual-rating regulations to prevent rating inflation in this model. To examine the regulatory effects of different types of regulations on Chinese corporate bond ratings, we utilize panel ordered logit models. Theoretical analysis and empirical tests show that, when the reputation effect is low, the single-rating regulation is better at improving rating quality, and when the reputation effect is high, the dual-rating regulation induces rating agencies to provide more accurate ratings. Compared to the regulatory effects of the single-rating and the multi-rating regulations, the dual-rating regulation most effectively improves the rating quality of corporate bonds and prevents rating inflation.

Manufacturing Enterprise Executive Career Expectation and Enterprise Risk: Theoretical Path and Empirical Evidence

This paper takes listed companies in Shanghai and Shenzhen stock markets as research samples to analyze and test the relationship between executive career expectation and enterprise risk. This paper argues that manufacturing enterprise executive career expectations have a dual impact on corporate risk, one is to increase corporate risk through investment effect, the other is to reduce corporate risk through reputation effect. The results show that, in the two effects, reputation effect plays a leading role, that is, the higher the career expectation of executives, the more attention they pay to the professional reputation they try to build. In order to protect their own reputation from damage, executives pay more attention to the risk management and internal control of enterprises, so as to reduce the risk of enterprises. This also shows that reputation has a "implicit" incentive effect on executives .This study provides a theoretical basis for enterprises to formulate "explicit" and "implicit" incentive contracts.

Environmental Governance Cooperative Behavior among Enterprises with Reputation Effect Based on Complex Networks Evolutionary Game Model

This paper first portrays the equilibrium payoff of enterprise’s cooperation of environmental governance based on the Cournot model. Secondly, the evolutionary game model in complex networks is adopted to depict the evolution of environmental governance cooperative behavior among enterprises. Further, the evolutionary process of environmental governance cooperative behavior of enterprises is simulated considering the supervision behavior of government and the reputation evaluation behavior of environmental social organization. The results show that the cooperation level of enterprise group under self-organization condition will reach a low level; the supervision of government can enhance the cooperation level of enterprise group with high betrayal tempatation while it has limited effect on enterprise group with low betrayal tempatation. The reputation evaluation behavior of environmental social organization can realize reputation effect to improve the the cooperation level of enterprise group with high betrayal tempatation. The enhance of reputation sensitivity can optimize equilibrium distribution of reputation and it can strengthen the reputation effect on cooperation level. Based on the analysis above, the suggestions to effectively improve cooperation level are given.

Dividend Yields, Stock Returns and Reputation

Problem/Relevance - The relationship between dividend yields and stock returns is an unresolved issue in finance. Previous papers show mixed results on the relationship. To clarify the relationship,we consider dividend reputation. We investigate whether dividend reputation plays a role in explaining the relationship between dividend yields and stockreturns.Research Objective/ Questions –We hypothesize that firms with dividend reputation tend to have less risk compared to firms without dividend reputation, and the expected return of firms with dividend reputation will be lower given the dividend yield, whichis called the “reputation effect.” A mix of firms with and without dividend reputation in a sample could distort the relationship between stock returns and dividend yields. We group stocks according to reputation and analyze the relationship between dividend yields and stock returns. Methodology - We construct our sample from all firms listed on the NYSE, AMEX, and NASDAQ stockexchanges. In our analysis, reputation effects are included to analyze the relationship between dividend yields and stockreturns. We divide our sample firms into three groups according to the track record of dividend payments to control for reputation effects: (1) reputation-established firms, (2) reputation-building initiation, and (3) no reputation firms. To test the hypotheses, we run the panel regression with reputation variables and the controlvariables.Major Findings –We find that the reputation effect is strongest for reputation-established firms and a weaker reputation effect for reputation-building younger firms.After controlling the reputation effect and other relevant variables, we find that there does exist a significantly positive relationship between dividend yields and stockreturns. Implications –The empirical results show that the reputation effect is higher for established firms with a good track record of dividend payments than for firms with a short history of dividend payments or for firms with an unreliable history of dividend payments. After controlling the reputation effect and other relevant variables, we find there exists a significantly positive relationship between dividend yields and stock returns. We also find that one year is not enough time for firms to build a dividend reputation.