CRA reputation and bond yield: evidence from the Chinese bond market

Xiaolu Hu, Haozhi Huang, Jing Shi, Hua Wang*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)


The paper examines the reputation effect of credit rating agencies (CRAs) in China. We find a negative association between CRAs’ reputation and public bonds’ offering yield spreads after controlling for endogeneity. Analyses of the correlation between CRA reputation and bond return volatility in the aftermarket and cross-sectional variations of reputation effects alongside a host of information environment proxies for issuers, we identify the information channel through which CRA reputation plays its role. This is further supported when we utilize an exogenous event, the introduction of an independent CRA (the China Bond Rating Co. Ltd), to explore the potential changes of the reputation effect.

Original languageEnglish
Pages (from-to)185-209
Number of pages25
JournalAsia-Pacific Journal of Financial Studies
Issue number2
Publication statusPublished - 1 Apr 2019


  • Credit rating agencies
  • Information environment
  • Reputation
  • Yield spreads


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