Contagion effects of successive bond rating downgrades

Maxime Merli and Alain Schatt

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: The object of this paper is to study the impact of successive changes in ratings of a leading firm on competitors of the same 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 the contagion effects among the main French and European competitors.

Keywords: Ratings; Contagion effects; Event studies; Telecommunications. (search for similar items in EconPapers)
JEL-codes: G14 G30 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2003-02

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