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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research

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Asymmetric benchmarking in bank credit rating, Journal of International Financial Markets, Institutions and Money 1; February (2012). Shen, Chung-Hua; Huang, Yu-Li; Hasan, Iftekhar


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Shen, Chung-Hua; Huang, Yu-Li; Hasan, Iftekhar 
Number of authors 3 
Status Published
Year of publication 2012 
Date 15.02.2012 
Name of article Asymmetric benchmarking in bank credit rating 
Name of journal Journal of International Financial Markets, Institutions and Money
Volume of issue 22 
Number of issue 1; February 
Pages 171-193 
Abstract This study proposes an information asymmetry hypothesis to examine why bank credit ratings vary among countries even when bank financial ratios remain constant. Countries are divided among those with low and high information asymmetry. The former include high-income countries, those in North America and West Europe regions, and those with strong institutional environment quality, whereas the latter group possess the opposite characteristics. This study hypothesizes that the influences of financial ratios on ratings are enhanced in low information asymmetry countries but reduced in countries with high information asymmetry. The sample includes the long-term credit ratings issued by Standard and Poor's from 86 countries during 2002–2008. The estimated results show that the effects of financial ratios on ratings are significantly affected by information asymmetries. Countries wishing to improve the credit ratings of their banks thus should reduce information asymmetry.
Free text descriptor in English Bank rating; Financial ratio; Information asymmetry; Institutional quality 
JEL-codes G21; G32; G38 
ISSN / e-ISSN 1042-4431 
auki Internet addresses
Additional information Available online 31 August 2011.
Notes BoF DP 13/2012 
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