A Study on The Timeliness of Credit Rating on Bond Defaults —	Evidence from Chinese Bond Market

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Economic Management Journal

Economic Management Journal (EMJ) is an international open access journal, concerning about the latest research results of economic management. The goal of the journal is to provide a global forum for scholars and researchers in this field to exchange ideas and promote the theoretical and practical development of economic management.The journal receives manuscripts written in Chinese or English. As for Chinese papers, the following it... [More] Economic Management Journal (EMJ) is an international open access journal, concerning about the latest research results of economic management. The goal of the journal is to provide a global forum for scholars and researchers in this field to exchange ideas and promote the theoretical and practical development of economic management.

The journal receives manuscripts written in Chinese or English. As for Chinese papers, the following items in English are indispensible parts of the paper: paper title, author(s), author(s)'affiliation(s),abstract and keywords. If this is the first time you contribute an article to the journal, please format your manuscript as per the sample paper and then submit it into the online submission system. Accepted papers will immediately appear online followed by printed hard copies by Ivy Publisher globally. Therefore, the contributions should not be related to secret. The author takes sole responsibility for his views.

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Paper Infomation

A Study on The Timeliness of Credit Rating on Bond Defaults — Evidence from Chinese Bond Market

Full Text(PDF, 87KB)

Author: Yubo Li, Xiaohan Xu

Abstract: With the increase of China’s bond issuance and slowdown of the economic growth, the potential credit risks such as bond default in the bond market are gradually emerging. The frequent occurrence of bond defaults and the problem of false credit ratings make bond investors and market participants more cautious about the credit ratings issued by rating agencies. Based on the default bonds from 2016 to 2019, this paper analyzes the adjustment of rating of defaulted bonds by rating agencies before default. It also compares the impact of both the regulatory events and the entrance of international agencies on timeless of credit ratings on default bonds. At the same time, the divergence of rating timeliness between different rating agencies is compared. The research shows that after the unified supervision of regulators and the punishment of Dagong Global Credit Rating Co.Ltd in 2018, the timeliness of rating agencies' downgrading of defaulted bonds has increased significantly; Compared with other rating agencies, the timeliness of rating agencies owned by international rating agencies are better.

Keywords: Bond Default, Credit Rating, Timeliness

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