Multiple Credit Ratings Paper - Final Version.pdf (903.92 kB)
Do multiple credit ratings reduce money left on the table? Evidence from U.S. IPOs
journal contribution
posted on 2023-06-10, 04:47 authored by Marc Goergen, Dimitrios Gounopoulos, Panagiotis KoutroumpisPanagiotis KoutroumpisUsing credit ratings as an uncertainty-reducing mechanism, we provide evidence of the beneficial impact of multiple credit ratings on reducing IPO underpricing and filing price revision. We find that the acquisition of multiple ratings in the pre-IPO period mitigates uncertainty more than the acquisition of a single rating. Multi-rated firms also have higher probabilities of survival than those with a single rating, whereas credit rating levels matter only for IPOs with more than one rating. The IPOs that are awarded the first rating on the borderline between investment and non-investment grades are more likely to seek an additional rating.
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Publication status
- Published
File Version
- Accepted version
Journal
Journal of Corporate FinanceISSN
0929-1199Publisher
ElsevierExternal DOI
Volume
67Page range
a101898 1-27Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2022-09-21First Open Access (FOA) Date
2022-09-22First Compliant Deposit (FCD) Date
2022-09-20Usage metrics
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