A comparison of criteria used by United States and Japanese credit rating agencies.

摘要

With regard to the ratings of Japanese firms, there are substantial instances of split ratings between non-Japanese rating agencies and Japanese rating agencies. According to a survey by the Japan Center for International Finance (JCIF, 1999), Japanese firms believe that Japanese rating agencies consider factors unique to their forms of corporate governance, that is, the keiretsu system, while US rating agencies place relatively little weight on factors peculiar to Japan.; Many authors emphasize the positive factors of the keiretsu system such as reduced costs of financial distress, low agency costs and reduced information asymmetry. However, it can be argued that there are negative factors of the keiretsu system such as moral hazard and the coinsurance problem.; I test whether Japanese rating agencies apply the same rating criteria as US rating agencies to evaluate Japanese firms with keiretsu ties. I find evidence that split ratings are caused by differences of rating scales, not by differences in rating criteria, and do not reject the null hypothesis. I also find evidence that Japanese rating agencies do not consider the positive keiretsu factors. This evidence contradicts the report of JCIF (1999). The results imply that both Japanese and US raters recognize the positive and the negative sides of the Japanese system.