Cornaggia, Jess; Cornaggia, Kimberly J. - In: Review of Financial Studies 26 (2013) 9, pp. 2229-2269
We compare the stability and timeliness of credit ratings produced by a traditional issuer-paid rating agency (Moody's Investors Service) and a subscriber-paid rater (Rapid Ratings). Moody's ratings exhibit less volatility but are slower to identify default risk. We control for Moody's aversion...