Detail publikačního výsledku

FIRM CREDIT RATING CHANGES, CAPITAL STRUCTURE, AND THE ASYMMETRIC MODERATING ROLE OF DEBT CAPACITY AND FINANCIAL CONSTRAINTS

KARAS, M.; NEMEC, D.; BALCERZAK, A.; ZINECKER, M.

Originální název

FIRM CREDIT RATING CHANGES, CAPITAL STRUCTURE, AND THE ASYMMETRIC MODERATING ROLE OF DEBT CAPACITY AND FINANCIAL CONSTRAINTS

Anglický název

FIRM CREDIT RATING CHANGES, CAPITAL STRUCTURE, AND THE ASYMMETRIC MODERATING ROLE OF DEBT CAPACITY AND FINANCIAL CONSTRAINTS

Druh

Článek WoS

Originální abstrakt

This study analyzes how debt capacity and financial constraints impact credit rating changes. Using a comprehensive sample of European companies, we analyze rating upgrades and downgrades separately to allow us to uncover whether the effects differ. Our results show that only one of the four commonly used proxies for debt capacity can explain credit rating changes. Specifically, we find that debt capacity can influence both rating upgrades and downgrades, but financial constraints or profitability can only impact rating downgrades. Our results are robust to various model specifications. The Monte Carlo simulation results reveal that uncertainty related to factors causing rating upgrades increases sharply when debt exceeds 30% of total assets. Similarly, when debt exceeds 50% of total assets, uncertainty related to rating downgrades surges.

Anglický abstrakt

This study analyzes how debt capacity and financial constraints impact credit rating changes. Using a comprehensive sample of European companies, we analyze rating upgrades and downgrades separately to allow us to uncover whether the effects differ. Our results show that only one of the four commonly used proxies for debt capacity can explain credit rating changes. Specifically, we find that debt capacity can influence both rating upgrades and downgrades, but financial constraints or profitability can only impact rating downgrades. Our results are robust to various model specifications. The Monte Carlo simulation results reveal that uncertainty related to factors causing rating upgrades increases sharply when debt exceeds 30% of total assets. Similarly, when debt exceeds 50% of total assets, uncertainty related to rating downgrades surges.

Klíčová slova

credit rating changes, debt capacity, financial constraints, capital structure, profitability, debt-to-total assets

Klíčová slova v angličtině

credit rating changes, debt capacity, financial constraints, capital structure, profitability, debt-to-total assets

Autoři

KARAS, M.; NEMEC, D.; BALCERZAK, A.; ZINECKER, M.

Vydáno

01.01.2025

Periodikum

Journal of Business Economics and Management

Svazek

6

Číslo

26

Stát

Litevská republika

Strany od

1329

Strany do

1357

Strany počet

29

URL

https://journals.vilniustech.lt/index.php/JBEM/article/view/25316

BibTex

@article{BUT200059,
  author="Michal {Karas} and  {} and  {} and Marek {Zinecker}",
  title="FIRM CREDIT RATING CHANGES, CAPITAL STRUCTURE, AND THE ASYMMETRIC MODERATING ROLE OF DEBT CAPACITY AND FINANCIAL CONSTRAINTS",
  journal="Journal of Business Economics and Management",
  year="2025",
  volume="6",
  number="26",
  pages="1329--1357",
  doi="10.3846/jbem.2025.25316",
  issn="1611-1699",
  url="https://journals.vilniustech.lt/index.php/JBEM/article/view/25316"
}