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http://dx.doi.org/10.5762/KAIS.2014.15.1.129

The effects of dominating large shareholders and foreign blockholders on the Korean firms' credit ratings  

Kim, Choong-Hwan (College of Industrial Science, Kongju National University)
Gong, Jaisik (College of Business & Economics, Daegu University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.15, no.1, 2014 , pp. 129-136 More about this Journal
Abstract
This paper examines the effects of dominating large shareholders and foreign blockholders on credit ratings. An effective governance mechanism is expected to lead to higher credit ratings through its impact on default risk of the firm. Our results show that dominating large shareholders have an adverse impact on credit ratings of domestic firms on the level of its statistical significance. Foreign shareholders are positively associated with credit ratings, contributing to the higher credit worthness of domestic firms.
Keywords
Credit ratings; Corporate governance; Foreign investors; Large shareholders; Ordered probit regression model;
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