Credit contagion and competitive effects of bond rating downgrades along the supply chain

Chang, Jung-Hsien; Hung, Mao‐Wei; Tsai, Feng-Tse

doi:10.1016/j.frl.2015.10.006

Cited by 22 publications

(19 citation statements)

References 12 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…A competitive effect is an effect that occurs when a nonreporter company's stock price moves in the opposite direction to a reporter company's stock price. Meanwhile, the contagion effect is the effect that occurs when a non-reporter company's stock prices move in the same direction (comove) with the stock price of reporters (Chang et al, 2015;.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In the literature, this condition is also known as intra-industrial information transfer or information spillover (Schipper, 1990;Chen et al, 2016;Khachoo and Sharma, 2016). There are two possible effects of intra-industrial information transfer, namely contagion and competitive effects (Lang and Stulz, 1992;Chang et al, 2015;Chen et al, 2016). Contagion effects indicate a consistent (equal) impact transmission while competitive effects indicate a contradictory (different) transmission of impacts on all companies in the industry.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The Intra-Industry Spillovers of Indonesian Right Offerings

Rafik¹,

Arafah²

2019

MIX

View full text Add to dashboard Cite

This study aims to examine the spillover effect of right offerings to the industry on the Indonesian Stock Exchange in the period 2009-2016. This study is designed using event study methodology. In total, there are 96 issuing companies (issuers) and 1205 non-issuing companies (non-issuers) used as the sample which was obtained using a purposive sampling technique. The test for information content on the right issues was conducted using standard t-test on the average cumulative abnormal return of issuers and non-issuers in the period t-10 to t+10 around the issuance. The research found positive abnormal returns for issuers in t0 to t+4 but did not confirm the spillover effect to non-issuers over the observed (window) periods. The average cumulative abnormal returns are randomly distributed during the window period. These results confirm the absence of intraindustry effect of right issues on the non-issuers’ performance

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Intra-Industry Spillovers of Indonesian Right Offerings

Rafik¹,

Arafah²

2019

MIX

View full text Add to dashboard Cite

show abstract

“…Albuquerque et al 36 use cross-country data from 1983 to 2009 to investigate the trade credit links in generating cross-border return predictability between international¯rms. Chang et al 37 study the impact of corporate credit rating downgrades on industrial competitors' credit risks (a horizontal relationship) and on those between suppliers and customers (vertical relationships). Their¯ndings reveal that competitors' and suppliers' experiences can signi¯cantly increase bond credit spreads in a rating downgrade.…”

Section: Literature Reviewmentioning

confidence: 99%

Research on Trade Credit Spreading and Credit Risk within the Supply Chain

Qian

Yang

Zhou

2019

Int. J. Info. Tech. Dec. Mak.

View full text Add to dashboard Cite

Capital constraints in the supply chain have linked trade credit to the banks’ credit risk exposure. This paper focuses on how trade credit, which is widespread in the supply chain, affects the banks’ risk exposure by constructing a two-echelon Stackelberg framework in a case involving supplier dominance. A numerical analysis illustrates the following: First, the contagion intensity, which measures trade credit’s impact on the banks’ risk exposure, positively relates to the uncertainty of demand. Second, the retailer’s characteristics have a significant, moderating effect on this positive relationship between the banks’ risk exposure and the uncertainty demand. Finally, suppliers can reduce the contagion intensity by screening different types of retailers, which consequently decreases the banks’ risk exposure.

show abstract

“…In addition, it was shown that the rating score was an important factor influencing the manner of managing an enterprise (corporate governance) (Bereskin et al, 2015;Ashbaugh-Skaife et al, 2006). The rating score given by the agencies may impact not only the enterprise which receives it, but also the industry in which it operates (suppliers and recipients of a given company in both the vertical and horizontal structure) (Chang et al, 2015). The authors Tyler R. Henry, Darren J. Kisgen and Juan (Julie) Wu noticed that the reduction of share prices translated into lower rating scores of particular companies, whereas increased rating scores had no significant impact on the change of share prices of the assessed company (Henry et al, 2015).…”

Section: Rating Agenciesmentioning

confidence: 99%

Determinants of Interest Rates on Corporate Bonds of Mining Enterprises

Ranosz

2017

Archives of Mining Sciences

View full text Add to dashboard Cite

This article is devoted to the determinants of interest rates on corporate bonds of mining enterprises. The study includes a comparison between the cost of foreign capital as resulting from the issue of debt instruments in different sectors of the economy in relation to the mining industry. The article also depicts the correlation between the rating scores published by the three largest rating agencies: S&P, Moody`s, and Fitch. The test was based on simple statistical methods. The analysis performed indicated that there is a dependency between the factors listed and the amount of interest rates on corporate bonds of global mining enterprises. Most significant factors include the rating level and the period for which the given series of bonds was issued. Additionally, it is not without significance whether the given bond has additional options. Pursuant to the obtained results, is should be recognized that in order to reduce the interest rate on bonds, mining enterprises should pay particular attention to the rating and attempt to include additional options in issued bonds. Such additional options may comprise, for example, an ability to exchange bonds to shares or raw materials.Keywords: mining corporate bonds, convertible bonds, callable and puttable bonds, bond's coupon Niniejszy artykuł został poświęcony determinantom oprocentowania obligacji korporacyjnych spółek górniczych. Do głównych czynników mających znaczący wpływ na wartość kuponu obligacji zaliczono: okres do wykupu obligacji, poziom ratingu oraz rodzaj obligacji. Każda z wymienionych zmiennych może wpływać na obniżenie oraz na podwyższenie wartości kuponu (oprocentowania) obligacji. Celem niniejszego opracowania jest zbadanie zależności pomiędzy kuponem a wymienionymi determinantami. Opracowanie zawiera również porównanie kosztu kapitału obcego wynikającego z emisji instrumentów dłużnych różnych sektorów gospodarki w stosunku do sektora górniczego. W artykule zbadano również korelację pomiędzy udzielanymi ratingami publikowanymi przez trzy największe agencje ratingowe, do których zaliczono: S&P, Moody`s oraz Fitch. Do przeprowadzenia badania wykorzystano proste metody statystyczne. Przeprowadzona analiza wykazała, iż istnieje zależność pomiędzy wymienionymi czynnikami a wartością oprocentowania obligacji emitowanych przez przedsiębiorstwa górnicze na świecie. 622Należy również stwierdzić, iż do najważniejszych należy zaliczyć poziom ratingu oraz okres na jaki została wyemitowana dana seria obligacji. Nie bez znaczenia jest również to czy dana obligacja posiada opcje dodatkowe. Na podstawie otrzymanych wyników należy stwierdzić, iż przedsiębiorstwa górnicze w celu obniżenia oprocentowania obligacji powinny zwracać szczególną uwagę na rating oraz starać się zwierać opcje dodatkowe w emitowanych przez siebie obligacjach. Taką opcją dodatkową może być na przykład możliwości zamiany obligacji na akcje czy też surowiec.Słowa kluczowe: górnicze obligacje korporacyjne, obligacje zamienne, obligacje callable i puttable, kupon obligacji

show abstract

Credit contagion and competitive effects of bond rating downgrades along the supply chain

Cited by 22 publications

References 12 publications

The Intra-Industry Spillovers of Indonesian Right Offerings

The Intra-Industry Spillovers of Indonesian Right Offerings

Research on Trade Credit Spreading and Credit Risk within the Supply Chain

Determinants of Interest Rates on Corporate Bonds of Mining Enterprises

Contact Info

Product

Resources

About