Significance of Financial and Non Financial Information on Credit Rating: An Empirical Study on Banking and Insurance Sectors of Pakistan

Muhammad Khalid Rashid, Muhammad Noor ul Haq, Umair Khalid and Abdul Basit

Journal of Accounting and Finance in Emerging Economies, 2021, vol. 7, issue 3, 757-765

Abstract: Purpose: Apart from standard spheres of financial institutions’ performance such as asset quality, profitability, liquidity and efficiency; the study investigates the influence of non-financial factors such as governance and management.Design/Methodology/Approach: This study utilizes 2009 through 2018 data for the sample of commercial banks and insurance companies of Pakistan to analyze the significance of financial and non-financial information on credit rating. The study is done by employing frequently used Fully Modified Ordinary Least Square (FMOLS).Findings: The main contribution lies including explanatory variables from various areas that have an impact on the financial position of the examined banks and insurance companies.Implications/Originality/Value: The obtained results suggest that the combined use of financial and non-financial information tends to a significant impact on credit rating.

Keywords: Financial and non-financial Sector; Credit Rating; Financial and non-financial Information (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:src:jafeec:v:7:y:2021:i:3:p:757-765

DOI: 10.26710/jafee.v7i3.1986

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