Rating shopping: evidence from the Chinese corporate debt security market

Zhang Chang, Xiaolu Hu, Zheyao Pan, Jing Shi*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)


We provide the first direct evidence on how issuers choose a credit rating agency (CRA). Using rating data from a leading CRA in China, we find that although in most cases the issuers publish more favourable ratings, in some cases issuers just select the ratings provided by CRAs they have business relationships with, especially when the more favourable ratings are above issuers’ prior ratings. Our further analysis suggests that this phenomenon is driven by the switching cost arising from the issuer being considered as a rating shopper when it obtains an upgrade from a CRA without a business relationship.

Original languageEnglish
Pages (from-to)2173-2200
Number of pages28
JournalAccounting and Finance
Issue numberS1
Early online date6 Jul 2020
Publication statusPublished - Apr 2021


  • Business relationship
  • Credit rating agencies
  • Rating shopping


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