Sovereign ceilings ‘‘lite’’ The impact of sovereign ratings on corporate ratingsReport as inadecuate




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Although credit rating agencies have gradually moved away from a policy of never rating a corporationabove the sovereign the ‘sovereign ceiling’, it appears that sovereign credit ratings remain a significantdeterminant of corporate credit ratings. We examine this link using data for advanced and emergingeconomies over the period of 1995–2009. Our main result is that a sovereign ceiling continues to affectthe rating of corporations. The results also suggest that the influence of a sovereign ceiling on corporateratings remains particularly significant in countries where capital account restrictions are still in placeand with high political risk.Nota general

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Author: Borensztein, Eduardo; - Cowan, Kevin; - Valenzuela Cano, Patricio; -

Source: http://repositorio.uchile.cl/



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