Analysis of Unsolicited Credit Ratings in Japan: New Evidence from Moody's
Previous studies show that the unsolicited ratings of S&P and Fitch are lower than the solicited ratings assigned by these two agencies. The unsolicited ratings of S&P and Fitch are based on publicly available information for a firm. However, no previous study has examined the unsolicited ra...
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| Veröffentlicht in: | Review of Pacific basin financial markets and policies 2009-03, Vol.12 (1), p.103-123 |
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| creator | Fairchild, Lisa M. Flaherty, Susan M. V. Shin, Yoon S. |
| description | Previous studies show that the unsolicited ratings of S&P and Fitch are lower than the solicited ratings assigned by these two agencies. The unsolicited ratings of S&P and Fitch are based on publicly available information for a firm. However, no previous study has examined the unsolicited ratings of Moody's because Moody's does not disclose whether its ratings are solicited or unsolicited. Using Moody's solicited and unsolicited ratings collected from a survey of Japanese firms, we find that unsolicited credit ratings are still lower than solicited ratings even though firms with unsolicited ratings provide Moody's with some degree of inside information. We also compare the unsolicited ratings of S&P with those of Moody's and find that Moody's ratings are no different than those assigned by S&P although S&P's unsolicited ratings are based on public information. Therefore, we conclude that, regardless of the rating agency, unsolicited ratings are lower than solicited ratings because firms with unsolicited ratings provide incomplete private information to rating agencies. |
| doi_str_mv | 10.1142/S0219091509001563 |
| format | Article |
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We also compare the unsolicited ratings of S&P with those of Moody's and find that Moody's ratings are no different than those assigned by S&P although S&P's unsolicited ratings are based on public information. Therefore, we conclude that, regardless of the rating agency, unsolicited ratings are lower than solicited ratings because firms with unsolicited ratings provide incomplete private information to rating agencies.</description><identifier>ISSN: 0219-0915</identifier><identifier>ISSN: 1793-6705</identifier><identifier>EISSN: 1793-6705</identifier><identifier>DOI: 10.1142/S0219091509001563</identifier><language>eng</language><publisher>Singapore: World Scientific Publishing Co. and Center for Pacific Basin Business, Economics and Finance Research</publisher><subject>Access to credit ; Advantages ; Capital costs ; Comparative analysis ; Credit market ; Credit rating ; Credit rating agencies ; Credit ratings ; Credit scoring ; Financial information ; Financial performance ; Japan ; JEL Classification: G10 ; JEL Classification: G20 ; Moody's ; Rating services ; Ratings & rankings ; Survey data ; unsolicited ratings</subject><ispartof>Review of Pacific basin financial markets and policies, 2009-03, Vol.12 (1), p.103-123</ispartof><rights>2009, World Scientific Publishing Co. and Center for Pacific Basin Business, Economics and Finance Research</rights><rights>Copyright World Scientific Publishing Co. 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We also compare the unsolicited ratings of S&P with those of Moody's and find that Moody's ratings are no different than those assigned by S&P although S&P's unsolicited ratings are based on public information. Therefore, we conclude that, regardless of the rating agency, unsolicited ratings are lower than solicited ratings because firms with unsolicited ratings provide incomplete private information to rating agencies.</description><subject>Access to credit</subject><subject>Advantages</subject><subject>Capital costs</subject><subject>Comparative analysis</subject><subject>Credit market</subject><subject>Credit rating</subject><subject>Credit rating agencies</subject><subject>Credit ratings</subject><subject>Credit scoring</subject><subject>Financial information</subject><subject>Financial performance</subject><subject>Japan</subject><subject>JEL Classification: G10</subject><subject>JEL Classification: G20</subject><subject>Moody's</subject><subject>Rating services</subject><subject>Ratings & rankings</subject><subject>Survey data</subject><subject>unsolicited ratings</subject><issn>0219-0915</issn><issn>1793-6705</issn><issn>1793-6705</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2009</creationdate><recordtype>article</recordtype><sourceid>X2L</sourceid><recordid>eNplkMtOHDEQRa0IpAwkH5CdxSKsGsr29KOyQ6OBQHhISVhbbj-CUXe7sXsYzd_HwyAihUVVLe65V1VFyBcGJ4zN-ekv4AwBWQkIwMpKfCAzVqMoqhrKPTLbysVW_0gOUnrMTNPUbEauzgbVbZJPNDh6P6TQee0na-giWuMn-lNNfviTqB_olRrV8I3e2jVdPntjB22pi6GnNyGYzXH6RPad6pL9_DoPyf358vfie3F9d3G5OLsudMm5KEqODaLJ-yADXbtaV7a1DXfAhSjn7bwViIpVHM3cWOGQK3DGtS1WmqmKi0PydZc7xvC0smmSvU_adp0abFglKWqOFaDI4NF_4GNYxXxvkhyaqkR8gdgO0jGkFK2TY_S9ihvJQG5fK9-9Nnt-7DzRjla_GdbJx7F1_SifpVCM57bJxQEwD58LWG7jVgQhGRfyYepzGuzS1iF2Jmlvh8k7_y_3_QJ_AQMzkls</recordid><startdate>200903</startdate><enddate>200903</enddate><creator>Fairchild, Lisa M.</creator><creator>Flaherty, Susan M. V.</creator><creator>Shin, Yoon S.</creator><general>World Scientific Publishing Co. and Center for Pacific Basin Business, Economics and Finance Research</general><general>World Scientific Publishing Co. Pte. Ltd</general><general>World Scientific Publishing Co. Pte., Ltd</general><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>200903</creationdate><title>Analysis of Unsolicited Credit Ratings in Japan: New Evidence from Moody's</title><author>Fairchild, Lisa M. ; Flaherty, Susan M. V. ; Shin, Yoon S.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c5223-529899d219910c7f7c6ebe82f023354b4b399a1629d4de3f92a0fdfbb96c1a623</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2009</creationdate><topic>Access to credit</topic><topic>Advantages</topic><topic>Capital costs</topic><topic>Comparative analysis</topic><topic>Credit market</topic><topic>Credit rating</topic><topic>Credit rating agencies</topic><topic>Credit ratings</topic><topic>Credit scoring</topic><topic>Financial information</topic><topic>Financial performance</topic><topic>Japan</topic><topic>JEL Classification: G10</topic><topic>JEL Classification: G20</topic><topic>Moody's</topic><topic>Rating services</topic><topic>Ratings & rankings</topic><topic>Survey data</topic><topic>unsolicited ratings</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Fairchild, Lisa M.</creatorcontrib><creatorcontrib>Flaherty, Susan M. V.</creatorcontrib><creatorcontrib>Shin, Yoon S.</creatorcontrib><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Review of Pacific basin financial markets and policies</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Fairchild, Lisa M.</au><au>Flaherty, Susan M. V.</au><au>Shin, Yoon S.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Analysis of Unsolicited Credit Ratings in Japan: New Evidence from Moody's</atitle><jtitle>Review of Pacific basin financial markets and policies</jtitle><date>2009-03</date><risdate>2009</risdate><volume>12</volume><issue>1</issue><spage>103</spage><epage>123</epage><pages>103-123</pages><issn>0219-0915</issn><issn>1793-6705</issn><eissn>1793-6705</eissn><abstract>Previous studies show that the unsolicited ratings of S&P and Fitch are lower than the solicited ratings assigned by these two agencies. The unsolicited ratings of S&P and Fitch are based on publicly available information for a firm. However, no previous study has examined the unsolicited ratings of Moody's because Moody's does not disclose whether its ratings are solicited or unsolicited. Using Moody's solicited and unsolicited ratings collected from a survey of Japanese firms, we find that unsolicited credit ratings are still lower than solicited ratings even though firms with unsolicited ratings provide Moody's with some degree of inside information. We also compare the unsolicited ratings of S&P with those of Moody's and find that Moody's ratings are no different than those assigned by S&P although S&P's unsolicited ratings are based on public information. Therefore, we conclude that, regardless of the rating agency, unsolicited ratings are lower than solicited ratings because firms with unsolicited ratings provide incomplete private information to rating agencies.</abstract><cop>Singapore</cop><pub>World Scientific Publishing Co. and Center for Pacific Basin Business, Economics and Finance Research</pub><doi>10.1142/S0219091509001563</doi><tpages>21</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0219-0915 |
| ispartof | Review of Pacific basin financial markets and policies, 2009-03, Vol.12 (1), p.103-123 |
| issn | 0219-0915 1793-6705 1793-6705 |
| language | eng |
| recordid | cdi_worldscientific_primary_S0219091509001563 |
| source | RePEc; EBSCOhost Business Source Complete |
| subjects | Access to credit Advantages Capital costs Comparative analysis Credit market Credit rating Credit rating agencies Credit ratings Credit scoring Financial information Financial performance Japan JEL Classification: G10 JEL Classification: G20 Moody's Rating services Ratings & rankings Survey data unsolicited ratings |
| title | Analysis of Unsolicited Credit Ratings in Japan: New Evidence from Moody's |
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