Local Credit Rating Agencies: Is their economic role underrated?

Ginevra Marandola

The Quarterly Review of Economics and Finance, 2021, vol. 81, issue C, 143-156

Abstract: This paper studies the effect of domestic credit rating agencies’ global penetration on domestic bond markets. The empirical evidence shows a significant positive effect of the opening of the first agency on domestic bond markets using cross-country analysis over a period that spans from 1990 to 2006. The positive effect is driven by the interaction between the agency’s activity and financial policies aimed at spurring securities’ markets, while it is not due to self-selection of domestic agencies into certain countries. Finally, countries with a larger number of domestic credit rating agencies show larger domestic bond markets in middle income economies but not in high income ones. Results suggest that domestic credit rating agencies may exert an important economic role in countries with less advanced financial markets.

Keywords: Credit Rating Agencies; Bond market; Financial regulation; Financial development (search for similar items in EconPapers)
JEL-codes: G18 G24 G28 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1062976921001034
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:81:y:2021:i:c:p:143-156

DOI: 10.1016/j.qref.2021.06.003

Access Statistics for this article

The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty

More articles in The Quarterly Review of Economics and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().