Credit ratings and managerial voluntary disclosures

He, G.

Abstract

This study investigates whether managers influence credit ratings via voluntary disclosures. I find that firms near a rating change have a higher incidence of a disclosure regarding product and business expansion (PBE) plans. This finding is more evident for firms that are subject to lower proprietary costs of disclosures, which implies that managers do trade off both the benefits and costs of the disclosures. I find no evidence that firms close to a rating change selectively release good news or suppress bad news on PBE. Overall, my results suggest that firms generally exhibit a credible commitment to maintaining disclosure transparency for a desired credit rating.

Citation

He, G. (2018). Credit ratings and managerial voluntary disclosures. Financial Review, 53(2), 337-378. https://doi.org/10.1111/fire.12149

• Journal Article Type: Article
• Acceptance Date: Jun 2, 2017
• Online Publication Date: Apr 2, 2018
• Publication Date: May 1, 2018
• Deposit Date: Dec 5, 2017
• Publicly Available Date: Apr 2, 2020
• Journal: Financial Review
• Print ISSN: 0732-8516
• Electronic ISSN: 1540-6288
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 53
• Issue: 2
• Pages: 337-378
• DOI: https://doi.org/10.1111/fire.12149
• Public URL: https://durham-repository.worktribe.com/output/1343366