Ioannou, S, Wójcik, D and Pažitka, V (2021) Financial centre bias in sub-sovereign credit ratings. Journal of International Financial Markets, Institutions and Money, 70. 101261. ISSN 1042-4431
Abstract
We investigate whether credit rating agencies are biased towards areas with strong financial centre characteristics, using data for 259 areas from 39 countries for 2004–17. We employ a range of measurements of financial centre characteristics, including a financial centre index, the share of financial and business services in an area’s total employment, and revenues from investment banking. For all financial centre proxies, our results confirm the existence of a ‘financial centre bias’ that is statistically and economically significant. For example, cities present in the global financial centre index have a rating about a category higher than would be justified by fundamentals.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2020 The Authors. This is an open access article under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0) (https://creativecommons.org/licenses/by/4.0/) |
Keywords: | Sub-sovereign credit ratings; Financial centres; Orderedprobit model; Panel data; Cultural proximity; Behavioural bias |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 09 Jun 2021 11:10 |
Last Modified: | 09 Jun 2021 11:10 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.intfin.2020.101261 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:175018 |