Credit ratings and managerial voluntary disclosures

He, G.

doi:10.1111/fire.12149

Credit ratings and managerial voluntary disclosures

He, G.

Authors

Dr Guanming He guanming.he@durham.ac.uk
Associate Professor

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

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Copyright Statement
This is the accepted version of the following article: He, G. (2018). Credit ratings and managerial voluntary disclosures. The Financial Review 53(2): 337-378, which has been published in final form at https://doi.org/10.1111/fire.12149. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.