Journal article
Credibility of Mandatory Disclosure by Credit Rating Agencies and Market Feedback
Journal of financial and quantitative analysis, pp.1-60
03/24/2026
DOI: 10.1017/S0022109026102725
Abstract
Using the Credit Rating Agency Reform Act of 2006, we examine the effect of the credibility of mandatory disclosure by credit rating agencies (CRAs) on market feedback. We find an increase in investment-price sensitivity for firms affected by the act, and the increase is enhanced when managers have greater incentives to glean information from prices—when firms are exposed to multiple dimensions of uncertainty, have higher growth options, face more competition, have less informed managers, or have higher accounting fraud risk. Our findings suggest that the greater credibility of CRA mandatory disclosure improves managerial learning from stock prices.
Details
- Title: Subtitle
- Credibility of Mandatory Disclosure by Credit Rating Agencies and Market Feedback
- Creators
- Jaewoo Kim - University of OregonSeyoung Park - Georgetown UniversityRyan Wilson - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Journal of financial and quantitative analysis, pp.1-60
- DOI
- 10.1017/S0022109026102725
- ISSN
- 0022-1090
- eISSN
- 1756-6916
- Language
- English
- Electronic publication date
- 03/24/2026
- Academic Unit
- Accounting
- Record Identifier
- 9985149578102771
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