How Dimensions of National Culture and Institutional Characteristics Influence Sovereign Rating Migration Dynamics

This study examines the effects of national culture and institutional characteristics on the rating migration dynamics of countries rated by Standard & Poor's (S&P) during the period January 1985-October 2011. The study finds that national culture and institutional characteristics have significant effects, particularly on the probability of a downgrade. The effects of culture are robust to various controls and samples. There is also evidence that S&P's past rating behaviours and Moody's recent rating impact on S&P's subsequent rating re-grades; however, the effect of Moody's rating and Watchlist is not as strong as the impact of other control variables