Rafay, Abdul, Chen, Yang, A. B. Naeem, Muhammad, Ijaz, Maham. (1397). Analyzing the Impact of Credit Ratings on Firm Performance and Stock Returns: Evidence from Taiwan. , 22(3), 767-786. doi: 10.22059/ier.2018.67452
Abdul Rafay; Yang Chen; Muhammad A. B. Naeem; Maham Ijaz. "Analyzing the Impact of Credit Ratings on Firm Performance and Stock Returns: Evidence from Taiwan". , 22, 3, 1397, 767-786. doi: 10.22059/ier.2018.67452
Rafay, Abdul, Chen, Yang, A. B. Naeem, Muhammad, Ijaz, Maham. (1397). 'Analyzing the Impact of Credit Ratings on Firm Performance and Stock Returns: Evidence from Taiwan', , 22(3), pp. 767-786. doi: 10.22059/ier.2018.67452
Rafay, Abdul, Chen, Yang, A. B. Naeem, Muhammad, Ijaz, Maham. Analyzing the Impact of Credit Ratings on Firm Performance and Stock Returns: Evidence from Taiwan. , 1397; 22(3): 767-786. doi: 10.22059/ier.2018.67452

Analyzing the Impact of Credit Ratings on Firm Performance and Stock Returns: Evidence from Taiwan

Iranian Economic Review
مقاله 9، دوره 22، شماره 3، پاییز 2018، صفحه 767-786    اصل مقاله (571.39 K)
شناسه دیجیتال (DOI): 10.22059/ier.2018.67452
نویسندگان
Abdul Rafay* 1؛ Yang Chen2؛ Muhammad A. B. Naeem3؛ Maham Ijaz4
1Department of Finance, School of Business & Economics, University of Management & Technology, Lahore, Pakistan
2股权研究所, Taipei, Taiwan
3School of Economics & Finance, Massey University, Auckland, New Zealand
4Department of Business Administration, Government College University Faisalabad, Pakistan
چکیده
The study covers three aspects; factors determining credit ratings, impact of credit ratings on performance of entities and the relationship between stock returns and credit ratings. The study focuses on the firms listed in Taiwan Stock Exchange (TSE) of Taiwan. The empirical analysis uses the data of 50 firms rated by Taiwan Ratings Corporation (TRC) for the period 2010-2015. Two estimation techniques Ordered Probit Model and Panel Data Regression are applied. Performance is measured using return on investment and Tobin’s Q factors. The findings depict that credit ratings are predicted by important firm specific factors like size and growth opportunities, capital intensity, asset returns, sector type etc. Results also suggested that firms with higher credit ratings tend to have better performance. For future research, similar study may be conducted with the ratings issued by other Taiwanese or non-Taiwanese agencies covering more firms and time span.
 
کلیدواژه‌ها
Keywords: TRC؛ TSE؛ Credit Ratings؛ Stock Returns؛ performance؛ Ordered Probit Model؛ Tobin’s Q. JEL Classification: G24
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