The influence of competitive positioning and rivalry on emerging market risk assessment

Gerry McNamara, Paul M. Vaaler

Research output: Contribution to journalArticlepeer-review

33 Scopus citations

Abstract

Rating agencies play a pivotal role in international credit transactions. Their sovereign risk-assessments are largely thought to reflect objective evaluations of the creditworthiness of potential borrowers. We test this assumption by examining the role that competitive positioning and dynamics play in the risk-assessments these agencies provide. Our analyses of agency risk-assessments for emerging-market sovereign borrowers indicate that they are significantly related to agency positioning as an incumbent or insurgent (new entrant), to agency specialization in sovereigns from particular geographic regions, and in some instances, to the level of agency rivalry in a specific sovereign market. Our findings suggest both significant general and contingent links between foreign investment risk-assessment and competitive positioning and rivalry among agencies.

Original languageEnglish (US)
Pages (from-to)337-347
Number of pages11
JournalJournal of International Business Studies
Volume31
Issue number2
DOIs
StatePublished - Jun 2000

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