Credit Rating Agencies and Their Effects: An Analysis on Balkan Countries

Abstract

The financial structure in the world has become more complex with the increase in global capital movements. For this reason, credit rating agencies have emerged as an important component of the financial structure. Standard and Poors, Moody's and Fitch are the three most important companies in this market. The grades given by these institutions highly affect the economic situation of the countries. In this study, information is given about credit rating agencies and it is aimed to measure the effect of the points given to countries by Standard and Poors, Moody's and Fitch, which are the most important of these institutions, on the economy. For this purpose, the effect of credit scores on the economic growth of Balkan countries except Kosovo was analyzed using panel data analysis method. In addition, unemployment, inflation, current account balance and budget balance data were included in the analysis. The findings obtained show that credit scores have an effect on the economic growth of countries.

Effects of Geopolitical Risks and Political Uncertainties on Stock Markets: Country Specific New Generation Panel Data Analysis for Developing Asian Countries

“…In addition, the credit ratings given by international credit rating agencies such as S&P, Fitch and Moody's are also influential on country economies. Yıldırım, Üre and Karaköy (2021), in their study on the subject, concluded that the scores given by credit rating agencies have an effect on real growth. According to the study, since the ratings given by these institutions are a guide for foreign investors, low ratings affect growth negatively by causing less foreign investment.…”