We test the biasedness of unsolicited ratings relative to solicited ratings using the ex post firm performance measured by the long-run stock performance of firms following rating announcements and changes. We find that the announcements of new unsolicited ratings are followed by negative...

This paper is the first attempt to analyze Standard & Poor’s unsolicited and solicited ratings by using bond-yield data in Japan. Our findings show that there are differences in firm characteristics between firms seeking solicited ratings and those that receive unsolicited ratings. Firms with...