 The effect of financial statement comparability on the gaps between credit ratings and bond implied ratings: Focusing on the moderating effect of Korean business groupsTae-San Kim and Yong-Shik Kim International Review of Financial Analysis, 2024, vol. 96, issue PA Abstract: This study analyzes whether financial statement comparability (FSC) affects the gaps between credit ratings (CRs) and bond implied ratings (BIRs), and Korean business groups mitigate the relation between FSC and rating gaps. Korean business groups have the diversified corporate governance structure and complex circulating investments, which makes it difficult for outside stakeholders to compare accounting information between firms in the same industry. Therefore, we propose the hypothesis that business groups are likely to moderate the negative relation between FSC and rating gaps. We find evidence, consistent with the hypotheses, that rating gaps are lower when FSC is greater. It also documents that business groups mitigate the negative relation between FSC and rating gaps. To the best of our knowledge, this research is the first empirical study to test the relation between FSC and rating gaps and the moderating effect of Korean business groups. Keywords: Comparability; Rating gaps; Credit ratings; Bond implied ratings; Business groups (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005702 DOI: 10.1016/j.irfa.2024.103638 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
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