When do differences in credit rating methodologies matter? evidence from high information uncertainty borrowers Samuel B. Bonsall IV, Kevin Koharki & Monica Neamtiu
Tipo de material: ArtículoDescripción: Páginas 53 a la 79Tema(s): En: The accounting review 2017 V.92 No.4 (Jul)Incluye tablas, referencias bibliográficas y apéndicesResumen: This study investigates whether and when differences in the credit rating agencies' methodologies result in differences in rating properties. In particular, this study focuses on differences in information processing constraints between a rating agency that utilizes qualitative analysis and direct access to borrowers' management in its rating process (Standard & Poor's) compared to one that does not (Egan Jones Ratings Company) and how these differences affect rating quality. We find that, as information uncertainty about borrowers increases, Egan Jones's rating accuracy, informativeness and timeliness decrease relative to Standard & Poor's. Our findings suggest that Egan Jones's more restricted rating methodology can lead to limitations in information processing and, thus, reductions in Egan Jones's rating quality advantage for borrowers with greater information uncertainty.Tipo de ítem | Biblioteca actual | Colección | Signatura topográfica | Info Vol | Copia número | Estado | Fecha de vencimiento | Código de barras | |
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Revistas | Central Bogotá Sala Hemeroteca | Colección Hemeroteca | 657 (Navegar estantería(Abre debajo)) | 2017 V.92 No.4 (Jul) | 1 | Disponible | 0000002032283 |
This study investigates whether and when differences in the credit rating agencies' methodologies result in differences in rating properties. In particular, this study focuses on differences in information processing constraints between a rating agency that utilizes qualitative analysis and direct access to borrowers' management in its rating process (Standard & Poor's) compared to one that does not (Egan Jones Ratings Company) and how these differences affect rating quality. We find that, as information uncertainty about borrowers increases, Egan Jones's rating accuracy, informativeness and timeliness decrease relative to Standard & Poor's. Our findings suggest that Egan Jones's more restricted rating methodology can lead to limitations in information processing and, thus, reductions in Egan Jones's rating quality advantage for borrowers with greater information uncertainty.