Credit ratings and information asymmetry on the Chinese syndicated loan market

摘要

We study whether local credit ratings alleviate information asymmetry inherent in the fast growing Chinese market by examining the syndicate structure of loans issued by Chinese borrowers in 2003-2011. Despite the common criticism regarding the quality of Chinese credit ratings, our results suggest that they serve an important role in reducing information asymmetry in the market between corporate insiders and outside borrowers. (C) 2014 Elsevier Inc. All rights reserved.