We investigate the informational roles of foreign ownership in local credit rating agencies (CRAs) in the Chinese onshore debt market, which was the world's largest emerging debt market from 2008 to 2017. We find a robust negative relationship between the bond offering yield and foreign...

This paper examines whether “rating shopping” plays a role in rating inflation by employing a set of uniquely indicative rating data from a leading credit rating agency in China. In line with rating shopping, issuers selectively choose and publish the most favourable rating. This phenomenon...

This paper examines how the incumbent issuer-pay credit rating agencies (CRAs) in China adjust their rating strategies as a response to the entry of an independent rating agency, China Bond Rating (CBR), which utilizes a combination of public utility and investor-pay business model. We find that...

We investigate the intra-industry spill-over effect of bond defaults on the price of stocks, outstanding bonds and new bond issuances in China, the largest emerging debt market. We use a sample of A-shares and public corporate debt securities from 2006 to 2018. In the stock market, we find...

Hedging creates value only when the policy is near optimal but can be harmful otherwise. This paper takes the US airline industry as an example and derives the optimal fuel cost hedging ratio as a function of firm-specific revenue and cost sensitivities, as well as the relative composition of...

In response to the recent elevated corporate credit risk environment in China’s credit market, we develop a probability of default (PD) measure for Chinese companies using actual corporate bond defaults by applying the Least Absolute Shrinkage and Selection Operator (LASSO) machine learning...