Financing and supervisory effects of credit ratings: evidence from mergers and acquisitions

被引:0
|
作者
Xu, Qian [1 ]
Wu, Yuhui [2 ]
Zhai, Lingling [3 ]
机构
[1] Funde Sino Life Insurance Co Ltd, Asset Management Ctr, Shenzhen, Peoples R China
[2] Xiamen Univ, Sch Management, Xiamen, Peoples R China
[3] Guangdong Univ Finance & Econ, Sch Accounting, Guangzhou, Peoples R China
基金
中国国家自然科学基金;
关键词
Credit rating; Mergers and acquisitions; Financing constraints; Default risk; BOND MARKET ACCESS; CAPITAL STRUCTURE; AGENCY COSTS; DEBT; CASH; WEALTH; FIRM; FLOW;
D O I
10.1108/NBRI-04-2021-0030
中图分类号
C93 [管理学];
学科分类号
12 ; 1201 ; 1202 ; 120202 ;
摘要
Purpose The purpose of this paper is to examine how credit ratings affect corporate financial behavior from the perspective of merger and acquisition (M&A) decisions. The goal is to test the financing and supervisory effects of credit ratings and study the economic consequences of credit ratings in the context of China. Design/methodology/approach Using a sample of Chinese A-share listed companies over the 2008-2017 period, this paper empirically examines the effect of credit ratings on firms' M&A decisions. The authors used a probit model for regression when they tested the effect of credit rating on M&A likelihood and a tobit model when they tested the effect of credit rating on M&A intensity. Findings First, rated enterprises tend to make more acquisitions compared with non-rated enterprises, consistent with the hypothesis that credit ratings alleviate financing constraints. Second, high-rated enterprises are more cautious toward M&As due to concerns about preserving their ratings, which indicates that credit ratings also play a supervisory role in the M&A process. Additional tests show that enterprises reduce M&A activity after a rating downgrade to avoid further deterioration in their ratings; this further supports the supervisory role of credit ratings. Originality/value This paper adds incremental evidence to the literature on the impact of credit ratings on corporate financial behavior and extends the literature on the factors influencing M&As. The authors provided empirical evidence from emerging capital markets for the financing and supervisory effects of credit ratings and provided theoretical guidance for promoting the stable, long-term development of China's credit rating industry.
引用
收藏
页码:553 / 573
页数:21
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