Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model
Issuance effects are regarded as one of the most important aspects referring to the regulatory guidelines of green corporate bond ratings. This paper developed a new incentive difference Hotelling model, considering four major factors, i.e., the direct effect of issuance, the indirect effect of issu...
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MDPI AG
2021-05-01
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| Series: | Sustainability |
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| Online Access: | https://www.mdpi.com/2071-1050/13/10/5368 |
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doaj-597975300c4442178d71941e6fd78e202021-05-31T23:43:49ZengMDPI AGSustainability2071-10502021-05-01135368536810.3390/su13105368Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling ModelHanyi Zhao0Yixiang Tian1Xiangyun Zhou2Luping Zhang3Wei Meng4School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610000, ChinaSchool of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610000, ChinaSchool of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610000, ChinaSchool of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610000, ChinaSchool of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610000, ChinaIssuance effects are regarded as one of the most important aspects referring to the regulatory guidelines of green corporate bond ratings. This paper developed a new incentive difference Hotelling model, considering four major factors, i.e., the direct effect of issuance, the indirect effect of issuance, the reputation of rating agencies and the regulatory penalties. In this model, how the direct effect and the indirect effect impact the dual rating mechanism and the integrated rating mechanism was discussed. Numerical experiments were conducted to explore the regulatory effects on the two defined mechanisms in different situations. The results demonstrate that under each mechanism, the direct and indirect effects of issuance indirectly improve the effectiveness and efficiency of regulation by increasing the environmental benefit information content in the rating information, and the indirect effect has a greater impact. Moreover, it provides specific recommendations for the design of a regulatory regime.https://www.mdpi.com/2071-1050/13/10/5368green corporate bonddirect issuance effectindirect issuance effectHotelling modelrating mechanisms |
| collection |
DOAJ |
| language |
English |
| format |
Article |
| sources |
DOAJ |
| author |
Hanyi Zhao Yixiang Tian Xiangyun Zhou Luping Zhang Wei Meng |
| spellingShingle |
Hanyi Zhao Yixiang Tian Xiangyun Zhou Luping Zhang Wei Meng Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model Sustainability green corporate bond direct issuance effect indirect issuance effect Hotelling model rating mechanisms |
| author_facet |
Hanyi Zhao Yixiang Tian Xiangyun Zhou Luping Zhang Wei Meng |
| author_sort |
Hanyi Zhao |
| title |
Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model |
| title_short |
Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model |
| title_full |
Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model |
| title_fullStr |
Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model |
| title_full_unstemmed |
Rating Regulatory Mechanism Effect Promotion under the Environmental Issuance Effects: Based on the Incentive Difference Hotelling Model |
| title_sort |
rating regulatory mechanism effect promotion under the environmental issuance effects: based on the incentive difference hotelling model |
| publisher |
MDPI AG |
| series |
Sustainability |
| issn |
2071-1050 |
| publishDate |
2021-05-01 |
| description |
Issuance effects are regarded as one of the most important aspects referring to the regulatory guidelines of green corporate bond ratings. This paper developed a new incentive difference Hotelling model, considering four major factors, i.e., the direct effect of issuance, the indirect effect of issuance, the reputation of rating agencies and the regulatory penalties. In this model, how the direct effect and the indirect effect impact the dual rating mechanism and the integrated rating mechanism was discussed. Numerical experiments were conducted to explore the regulatory effects on the two defined mechanisms in different situations. The results demonstrate that under each mechanism, the direct and indirect effects of issuance indirectly improve the effectiveness and efficiency of regulation by increasing the environmental benefit information content in the rating information, and the indirect effect has a greater impact. Moreover, it provides specific recommendations for the design of a regulatory regime. |
| topic |
green corporate bond direct issuance effect indirect issuance effect Hotelling model rating mechanisms |
| url |
https://www.mdpi.com/2071-1050/13/10/5368 |
| work_keys_str_mv |
AT hanyizhao ratingregulatorymechanismeffectpromotionundertheenvironmentalissuanceeffectsbasedontheincentivedifferencehotellingmodel AT yixiangtian ratingregulatorymechanismeffectpromotionundertheenvironmentalissuanceeffectsbasedontheincentivedifferencehotellingmodel AT xiangyunzhou ratingregulatorymechanismeffectpromotionundertheenvironmentalissuanceeffectsbasedontheincentivedifferencehotellingmodel AT lupingzhang ratingregulatorymechanismeffectpromotionundertheenvironmentalissuanceeffectsbasedontheincentivedifferencehotellingmodel AT weimeng ratingregulatorymechanismeffectpromotionundertheenvironmentalissuanceeffectsbasedontheincentivedifferencehotellingmodel |
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1721416717240893440 |