Journal of Banking & Finance Vol. 37 No. 11 2013
Sovereign ceilings “lite”? The impact of sovereign ratings on corporate ratings
open access
Abstract
Although credit rating agencies have gradually moved away from a policy of never rating a corporation above the sovereign (the ‘sovereign ceiling’), it appears that sovereign credit ratings remain a significant determinant of corporate credit ratings. We examine this link using data for advanced and emerging economies over the period of 1995–2009. Our main result is that a sovereign ceiling continues to affect the rating of corporations. The results also suggest that the influence of a sovereign ceiling on corporate ratings remains particularly significant in countries where capital account restrictions are still in place and with high political risk.
- DOI
- 10.1016/j.jbankfin.2013.07.006
- Volume
- 37
- Issue
- 11
- Pages
- 4014-4024
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib