Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Determinants of Credit Rating and the Effect of Regulatory Disclosure Requirements: Evidence from an Emerging Market

The Determinants of Credit Rating and the Effect of Regulatory Disclosure Requirements: Evidence... AbstractWe examine the determinants of credit rating for the debt instruments of Indian firms. The ordered probit model analysis of firms with rating announcements by CARE, CRISIL, and ICRA, the major rating agencies in India, indicates that interest coverage, profitability, financial leverage, market size, stock beta, and volatility have a significant effect on credit ratings. We find evidence that the credit rating levels have become lower after the market regulator’s passage of Transparency and Disclosure Norms in June 2010. The results suggest that regulatory disclosure requirements influence rating agencies to be conservative in their rating standards. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia-Pacific Journal of Risk and Insurance de Gruyter

The Determinants of Credit Rating and the Effect of Regulatory Disclosure Requirements: Evidence from an Emerging Market

Download PDF
26 pages

Loading next page...
 
/lp/de-gruyter/the-determinants-of-credit-rating-and-the-effect-of-regulatory-qhwOKZeOS2
Publisher
de Gruyter
Copyright
© 2022 Walter de Gruyter GmbH, Berlin/Boston
ISSN
2153-3792
eISSN
2153-3792
DOI
10.1515/apjri-2021-0027
Publisher site
See Article on Publisher Site

Abstract

AbstractWe examine the determinants of credit rating for the debt instruments of Indian firms. The ordered probit model analysis of firms with rating announcements by CARE, CRISIL, and ICRA, the major rating agencies in India, indicates that interest coverage, profitability, financial leverage, market size, stock beta, and volatility have a significant effect on credit ratings. We find evidence that the credit rating levels have become lower after the market regulator’s passage of Transparency and Disclosure Norms in June 2010. The results suggest that regulatory disclosure requirements influence rating agencies to be conservative in their rating standards.

Journal

Asia-Pacific Journal of Risk and Insurance – de Gruyter

Published: Jan 1, 2023

Keywords: credit rating; regulations; emerging markets; G24; G28

There are no references for this article.