A tale of two intermediaries: A discussion of Johnston, Markov and Ramnath (2009), and Cheng and Neamtiu (2009) Academic Article uri icon

abstract

  • Cheng and Neamtiu examine whether credit rating agencies exploit market power to sell a substandard product. Their evidence is suggestive, but plausible alternative hypotheses could explain their results. Johnston, Markov and Ramnath provide first evidence on the bond and firm characteristics that determine the quantity of sell-side debt analyst coverage that a corporate bond receives. They also find that debt analysts anticipate credit rating changes and add information to markets incremental to credit ratings, suggesting debt analysts will be important to future research on bond markets. These results also suggest a method for refining tests of rating agency market power. 2008 Elsevier B.V. All rights reserved.

published proceedings

  • Journal of Accounting and Economics

author list (cited authors)

  • Kolasinski, A. C.

citation count

  • 3

complete list of authors

  • Kolasinski, Adam C

publication date

  • January 2009