Article abstract

Journal of Economics and International Business Management

Research Article | Published February 2020 | Volume 8, Issue 1, pp. 15-20.

doi: https://doi.org/10.33495/jeibm_v8i1.19.120

 

International rating agencies and corporate impact: A case study in Iberian companies

 


 

 

Vasco Soares1

Sónia Carvalho2

Mafalda Mendes-Ribeiro3*

 

Email Author

 

1. Instituto Superior do Vouga, Santa Maria da Feira, Porto, Portugal.


2. Instituto Politécnico de Viana do Castelo, Valença, Portugal.

 

3. Departamento de Economia e Gestão, Universidade Portucalense, Porto, Portugal.


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Citation: Soares V, Carvalho S, Mendes-Ribeiro M (2020). International rating agencies and corporate impact: A case study in Iberian companies. J. Econ. Int. Bus. Manage. 8(1): 15-20.

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 Abstract 


This study intended to analyse the impact of Rating Notation, from four of the major International Credit Rating Agencies, in Iberian private companies. Primary data was collected via SABI Database, with financial relevant data of Iberian private companies, in a time frame from 2003 to 2015. Results were determined by an empirical analysis, through a new econometric model, starting with correlations between leverage and variables Return on Assets, Return on Equity, Dimension, Tangibility, Sales Variation, Political Risk and Critical Political Risk. Critical Political Risk is a dummy variable on notations of the Credit Rating Agencies. Considering the impact of these international notations, we address the issue of how this notation impacts domestic Political Risk and affect companies’ capital structure. Support evidence was found for our hypothesis: as Political Risk increases, Leverage tends to decrease. Further studies interest lays in research how CPR affects each company, measuring that risk by company, and analysing in detail the impact of Rating Notation in the decision of financing in private companies from Iberian Market.

Keywords  International credit rating agencies   financial crisis   corporate structure   leverage   

 

 

Copyright © 2020 Author(s) retain the copyright of this article.

This article is published under the terms of the Creative Commons Attribution License 4.0

 

 

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