MILLER COLLEGE RESEARCH COLLOQUIUM
Managerial Ability and Credit Rating Change
12:00 - 1:30 p.m., Thursday, February 25, 2016Whitinger Building room 145, Hall of Fame Conference RoomRSVP before February 15, 2016
Presented by Kris KemperAssistant Professor of Finance
This study examines the relation between managerial ability and credit rating change. We predict that firms with more able managers are more likely to receive upgrades in their credit ratings. We find a significant and positive relation between managerial ability and change in credit ratings, suggesting more able managers can take effective actions to improve their credit ratings. However, we also find that small changes in managerial ability do not influence credit rating. Similarly, we find that changes in managerial ability do not alter Credit Watch warnings. We do find evidence to suggest that the ablest managers are able to recover a lost credit rating in the year following a downgrade.
About Kris Kemper
Kris Kemper, Assistant Professor of Finance, received his Ph.D. in Finance from Oklahoma State University in 2011. His current research interests include capital structure, credit ratings, debt heterogeneity and inflation hedging.