The Determinants of Credit Rating: Brazilian Evidence
This study attempts to identify the determinant factors of credit rating in Brazil. The relevance of this proposal is based on the importance of the subject as well as the uniqueness of the Brazilian market. As for originality, the great majority of previous studies regarding credit rating have...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Associação Nacional de Pós-Graduação e Pesquisa em Administração (ANPAD)
2014-04-01
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| Series: | BAR: Brazilian Administration Review |
| Subjects: | |
| Online Access: | http://www.anpad.org.br/periodicos/arq_pdf/a_1463.pdf |
| Summary: | This study attempts to identify the determinant factors of credit rating in Brazil. The relevance of this proposal is
based on the importance of the subject as well as the uniqueness of the Brazilian market. As for originality, the
great majority of previous studies regarding credit rating have been developed in the US, UK and Australia;
therefore the effect on other markets is still unclear, especially in emerging markets, like Brazil. We’ve used a
Generalized Estimating Equations (GEE) model considering a panel structure with a categorical dependent
variable (credit rating) and ten independent variables: leverage, profitability, size, financial coverage, growth,
liquidity, corporate governance, control, financial market performance and internationalization. The sample
consisted of 153 rating observations during the period of 1997-2011 for a total of 49 public firms operating in the
Brazilian Market. Results showed that leverage and internationalization are significant at the 1% level in
explaining credit rating. Performance in the financial market was significant at a 5% level; profitability and
growth were also statistically significant, but at a 10% significance level. |
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| ISSN: | 1807-7692 1807-7692 |