Credit Rating Inflation and Firms' Investments
研究信用评级机构在债券融资博弈中抬高评级如何影响企业投资决策，发现评级膨胀可能降低经济效率，使更多企业获得高评级并冒险投机。
ABSTRACT We analyze credit rating effects on firm investments in a rational bond financing game that features a feedback loop. The credit rating agency (CRA) inflates the rating, providing a biased but informative signal to creditors. Creditors' response to the rating affects the firm's investment decision and thus its credit quality, which is reflected in the rating. The CRA might reduce ex ante economic efficiency, which results solely from its strategic effect: the CRA assigns more firms high ratings and allows them to gamble for resurrection. We derive empirical predictions on the determinants of rating standards and inflation and discuss policy implications.