Do personal connections improve sovereign credit ratings?
John Thornton () and
Finance Research Letters, 2020, vol. 33, issue C
In a large sample of sovereign debt issues, we show that a personal connection between senior executives in credit rating agencies and leading politicians in the sovereign results in an improved rating. A test on bond yields suggest that the personal connection reflects a favorable treatment of the issuer.
Keywords: Personal connections; Sovereign credit ratings; Information asymmetries (search for similar items in EconPapers)
JEL-codes: D82 G24 L14 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:33:y:2020:i:c:s1544612319302661
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