Sovereign ceilings ‘‘lite’’? The impact of sovereign ratings on corporate ratings
Author
dc.contributor.author
Borensztein, Eduardo
Author
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Cowan, Kevin
es_CL
Author
dc.contributor.author
Valenzuela Cano, Patricio
es_CL
Admission date
dc.date.accessioned
2014-01-10T18:48:09Z
Available date
dc.date.available
2014-01-10T18:48:09Z
Publication date
dc.date.issued
2013
Cita de ítem
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Journal of Banking & Finance 37 (2013) 4014–4024
en_US
Identifier
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DOI:10.1016/j.jbankfin.2013.07.006
Identifier
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https://repositorio.uchile.cl/handle/2250/126201
General note
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Artículo de publicación ISI
en_US
Abstract
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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.