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Korean J Financ Stud > Volume 46(4); 2017 > Article
Korean Journal of Financial Studies 2017;46(4):785-807.
DOI: https://doi.org/10.26845/KJFS.2017.09.46.4.785    Published online September 30, 2017.
Credit Ratings and Corporate Investment Decisions
Taekyu Kim, Jungsoon Shin
신용등급과 기업의 투자의사결정
김태규, 신정순
1한림대학교
2이화여자대학교
Abstract
This paper investigates the effects of credit ratings on corporate investment decisions. Examining investment decisions of firms on the Korea stock market from 2000 to 2013, we document that upgraded (downgraded) firms tend to increase (decrease) capital investment. In addition we confirm that credit rating upgrades and downgrades have differential effects on corporate investment decisions. Credit rating downgrades only affect capital investment in the same year, whereas upgrades have effects on capital investment in the next year as well as in the same year. Moreover the impact of credit rating upgrades on capital investment in the next year is stronger than in the same year. High-growth-opportunity firms show greater effects of credit rating upgrades on capital investment than low-growth-opportunity firms. For downgrades, however, we do not find the differential effects between high-growth-opportunity and low-growth-opportunity firms. This study would provide us new insights on the effects of credit ratings on corporate investment decisions.
Key Words: 신용등급,투자의사결정,자본투자,유형자산,성장기회,Credit Rating,Investment Decision,Capital Investment,Tangible Asset,Growth Opportunity


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