دانلود مقاله ISI انگلیسی شماره 83728
عنوان انگلیسی
Credit ratings and corporate cash holdings: Evidence from Korea’s corporate reform after the 1997 Asian financial crisis
کد مقاله سال انتشار تعداد صفحات مقاله انگلیسی
83728 2018 10 صفحه PDF
منبع

Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)

Journal : Japan and the World Economy, Volume 45, March 2018, Pages 9-18

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چکیده انگلیسی

We examine the extent to which credit ratings affect firms’ cash holdings by investigating the circumstances in Korea after the 1997 Asian financial crisis. We find that, due to the costs and benefits associated with different rating levels, credit ratings are a major consideration for corporate cash management. Specifically, firms that become relatively sensitive to rating changes increase their cash holdings, either to improve the chances of an upgrade, or to avoid a downgrade. Furthermore, this effect is driven by chaebol business groups that increasingly rely on external financing that depends on credit ratings following the attenuation of their internal capital markets. Finally, we show that the impact of credit ratings on firms’ cash holdings is more noticeable when firms are more prominent in the market.