MARC Record from harvard_bibliographic_metadata

LEADER: 01842nam a2200229Ka 4500
001 011792772-4
005 20101006133627.0
008 081219s2008 maua b 000|0 eng d
035 0 $aocn422212319
100 1 $aBecker, Bo.
245 10 $aReputation and competition :$bevidence from the credit rating industry /$cBo Becker and Todd Milbourn.
260 $a[Boston :$bHarvard Business School],$cc2008.
300 $a35 p. :$bill. ;$c28 cm.
490 1 $aWorking paper / Harvard Business School ;$v09-051
500 $a"October 2008"--Publisher's web site.
504 $aIncludes bibliographical references.
520 $aFair and accurate credit ratings arguably play an important role in the financial system. In an environment absent free entry of rating agencies, the provision of quality ratings is at least partially sustained by the reputational concerns of the rating agencies. The economically significant entry of a third agency into a market that was previously best described as a duopoly provides a unique experiment to examine the effect of increased competition on the disciplining effects of reputation. Using a variety of data sources, we find that competition leads to more issuer-friendly and less informative ratings. First, the credit ratings issues by the two incumbent agencies increased toward good ratings. Second, the correlation between bond yields and ratings fell. And lastly, negative stock price responses to announced rating downgrades are larger in absolute value (a downgrade in this weaker ratings environment is even worse news). Ultimately, our findings are consistent with models that suggest competition can impede the reputational mechanism.
700 1 $aMilbourn, Todd.
710 2 $aHarvard Business School.
830 0 $aWorking paper (Harvard Business School) ;$v09-051.
988 $a20081219
906 $0MH