Are there contagion or competition effects for non rated firms?The case of successive bond rating downgrades of Alcatel

Maxime MERLI and Alain Schatt ()

Working Papers FARGO from Université de Bourgogne - Latec/Fargo (Research center in Finance,organizational ARchitecture and GOvernance)

Abstract: The object of this paper is to study the impact of successive changes in ratings of the leading firm on non rated firms belonging to the same stock index sector. Two courses of research are being mobilized regarding, on the one hand, the incidence of downgrading of ratings on the value of the firms and on the other hand, the contagion effects associated with the report of bad news. The analysis of the successive downgrading of the ratings of Alcatel, world leader in the telecommunications infrastructure, allows us to point out minor contagion effects among non rated French firms belonging to the same stock index sector.

Keywords: ratings; contagion effects; information transfer; event studies. (search for similar items in EconPapers)
JEL-codes: G14 G30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn
Date: 2007-06
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