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DID FOREIGN OWNERSHIP OF KOREAN CREDIT RATING AGENCIES IMPROVE THEIR RATINGS?
Author(s) -
Joe Denis Yongmin,
Oh Frederick Dongchuhl
Publication year - 2017
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12176
Subject(s) - credit rating , bond credit rating , foreign ownership , business , equity (law) , quality (philosophy) , accounting , credit reference , financial system , finance , economics , foreign direct investment , credit risk , philosophy , epistemology , political science , law , macroeconomics
In this study, we investigate whether foreign equity participation fostered the growth of Korea's credit rating industry during the 2002–2013 period. We find that the rating quality deteriorated steadily even though the foreign ownership of Korea's credit rating agencies increased: Rating levels went up. Our analysis indicates that the Korean government's policy of gradually relaxing the restrictions on foreign ownership of local credit rating agencies was ineffectual. ( JEL G24, F21, F65, D43)