Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264479 
Year of Publication: 
2021
Citation: 
[Journal:] Scottish Journal of Political Economy [ISSN:] 1467-9485 [Volume:] 69 [Issue:] 2 [Publisher:] Wiley Periodicals, Inc. [Place:] Hoboken, USA [Year:] 2021 [Pages:] 186-224
Publisher: 
Wiley Periodicals, Inc., Hoboken, USA
Abstract: 
Two contradictory strands of the rating literature criticize that rating agencies merely follow the market on the one hand, and emphasizing that rating changes affect capital movements on the other hand. Both focus on explaining rating levels rather than the timing of rating announcements. Contrarily, we explicitly differentiate between a decision to assess a country and the actual rating decision. We show that this differentiation significantly improves the estimation of the rating function. The three major rating agencies treat economic fundamentals similarly, while differing in their response to other factors such as strategic considerations. This reconciles the conflicting literature.
Subjects: 
decision timing
rating agencies
sovereign risk
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article
Document Version: 
Published Version

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