Information Economics of Asian Bond Markets: A Comparative Analysis of Credit Agencies

ABSTRACT

This paper examines financial data and credit ratings of corporate bond issuers in East Asia. The empirical results suggest that the U.S.-based credit agency principally monitors issuers' creditworthiness as a determinant of corporate bond ratings. In contrast, local agencies focus on profitability and firm size. We consider that the similarities and differences in determinants originate from the following: (1) the business experience of agencies; and (2) the degree of development of each individual market.

KEYWORDS:

• Credit rating agency
• bond market
• East Asia