@article{da237c5ecc9b4f969e35d18243521296,
title = "Does regulatory certification affect the information content of credit ratings?",
abstract = "We exploit an investor-paid rating agency's designation as a Nationally Recognized Statistical Rating Organization (NRSRO) to test whether this certification affects the agency's information production. We use a certified issuer-paid agency as a benchmark and find robust evidence that the investor-paid agency's ratings policy - both timelier and more symmetric with respect to positive and negative information - persists after it became certified for regulatory compliance. Our results suggest that ratings policy is more a function of rating agency compensation structure than the NRSRO certification by the U.S. Securities and Exchange Commission.",
author = "Valentina Bruno and Jess Cornaggia and Cornaggia, {Kimberly J.}",
note = "Funding Information: The authors thank the department editor (Gustavo Manso), the associate editor, and two anonymous referees for helpful comments. The authors also thank Matt Billet, Alex Butler, Andrew Ellul, John Griffin, S?bastien Michenaud, Christian Opp, Marcus Opp, Eli Sherrill, Han Xia, and audience members at the 2012 Financial Intermediation Research Society meeting, 2012 Financial Management Association meeting, Indiana University, Texas AandM University, and Rice University. The authors thank Egan-Jones Ratings Company for providing its proprietary ratings data and Peter Arnold for helpful interpretation. The authors are grateful to the Kogod School of Business for providing access to Moody's Default and Recovery Database. J. Cornaggia gratefully acknowledges financial support from the Anderson Faculty Excellence Fund. Any errors belong to the authors. Publisher Copyright: {\textcopyright} 2016 INFORMS.",
year = "2016",
month = jun,
doi = "10.1287/mnsc.2015.2188",
language = "English (US)",
volume = "62",
pages = "1578--1597",
journal = "Management Science",
issn = "0025-1909",
publisher = "INFORMS Inst.for Operations Res.and the Management Sciences",
number = "6",
}