Do changes in credit ratings of REITs affect their capital structure decisions?

Existing research has highlighted the high leverage ratio of Real Estate Investment Trusts (REITs). To the extent that credit rating is important to REITs when sourcing for capital from the public debt markets, our paper investigates the effect of changes in REIT credit ratings on capital structure decisions while controlling for endogeneity effects. Our results indicate that REITs that face the prospect of an imminent credit rating downgrade issue approximately 11% less debt net of equity as a percentage of total assets than other REITs. This effect is asymmetric in that positive rating outlooks do not have a significant impact on REIT capital structure activities.     

商贾历史剧中的儒商文化及其现代意义

近年来商贾历史剧热播,中国近现代史上的商人风采、商场风云异彩纷呈,有力地展现了仁、德、信、义等富有中国儒家传统特色的商业文化、道德和伦理,可为现代市场经济发展提供新的＂契机＂,为构建现代商业伦理提供新的文化资源。     

“士魂”与“商才”：儒商文化内涵界定问题辨

要疏解儒商文化的现代转型意义,必须对＂儒商＂及其品格进行理论辨析。一要从儒学流变角度来分析儒商之可能,做到＂儒商＂的名至实归、名副其实;二是对＂儒商＂品格作一内在分梳,疏释＂士魂＂与＂商才＂的应该具有的理论内涵,从而纠正有关儒商文化方面的一些习以为常的错误看法。     

The impact of meeting or beating analysts' operating cash flow forecasts on a firm's cost of debt

Extant literature provides conflicting results with respect to the usefulness and accuracy of analysts' operating cash flow forecasts. Our study empirically examines the importance and influence of meeting or beating analysts' operating cash flow forecasts on a firm's cost of debt. Results indicate that firms meeting/beating analysts' cash flow forecasts have higher initial bond ratings as well as lower initial bond yields. Additionally, based upon an analysis of rating changes, firms meeting or beating cash flow forecasts have a higher probability of receiving a debt rating upgrade and a lower probability of a ratings downgrade compared to firms missing cash flow forecasts. A direct comparison of the importance of meeting/beating cash flow versus earnings benchmarks indicates that debt market participants appear to incrementally value both types of forecasts, and contrary to selected equity market findings, neither forecast subsumes the other for debt market participants.     

我国外部评级使用现状和发展方向

近几年,我国债券市场发展迅猛,外部评级在我国资本市场中发挥的作用越发凸显。然而,由于对信用评级的认识偏差,我国在对外部评级的使用方面存在一些问题,阻碍了我国债券市场以及资本市场的发展。借鉴国外在使用外部评级方面的先进经验,我国除应继续发挥外部评级的作用外,也应及时纠正对外部评级的不合理使用问题,减少对外部评级的过度依赖和不当使用。     

An Extension and Further Validation of the Potential for Conflict Index

The Potential for Conflict Index (PCI) was developed to facilitate understanding and applicability of leisure, recreation, and human dimensions findings to managerial concerns. The PCI ranges from 0 (minimal potential for conflict) to 1 (maximum potential for conflict) and simultaneously describes a variable's central tendency, dispersion, and shape using a graphic display. This article (a) describes applications of the original formulation of the PCI (PCI₁) to illustrate the statistic's practical utility, (b) introduces the second generation of the PCI (PCI₂) and discusses enhancements incorporated in this version, (c) describes efforts to validate the PCI₂, and (d) offers suggestions for continuing the empirical validation process. Programs for calculating, graphing, and comparing PCI₂ values are freely available from http://welcome.warnercnr.colostate.edu/~jerryv.     

Anomalies and financial distress

This paper explores commonalities across asset pricing anomalies. In particular, we assess implications of financial distress for the profitability of anomaly-based trading strategies. Strategies based on price momentum, earnings momentum, credit risk, dispersion, idiosyncratic volatility, and capital investments derive their profitability from taking short positions in high credit risk firms that experience deteriorating credit conditions. In contrast, the value-based strategy derives most of its profitability from taking long positions in high credit risk firms that survive financial distress and subsequently realize high returns. The accruals anomaly is an exception. It is robust among high and low credit risk firms in all credit conditions.     

Do Credit Ratings Really Affect Capital Structure?

This paper revisits recent investigations into the role credit ratings play in the marginal financing behavior of firms. Although it has long been documented that credit ratings may be an important determinant of firm capital structure policy, academics have only recently subjected this motivation to empirical scrutiny. We add to the brief existing literature by investigating the sensitivity of marginal financing behavior of firms to a number of attributes deemed to capture firms’ affinity to emphasize credit ratings in their financing behavior. Our results suggest that credit ratings are not a first‐order concern in capital structure decisions.     

Switching before the pitch: Exploring television channel changing before the ads even start

Although much research examines ‘ad zapping’ or channel changing during the commercials, the present work explores preemptive ad avoidance before the commercials begin. Television programs give different ad signals, which could alter rates of preemptive ad avoidance. Ad pods from two hit shows were explored using second-by-second channel-changing data; rates of preemptive ad avoidance were practically important and varied between shows. Inspection of program episodes suggested that the show with more preemptive ad zapping gave clearer ad signals and had more ‘ad safe’ time per episode, that is, there was more time when an ad break would not occur clearly. The data suggest that advertisers should seek unit-specific measures of opportunities to see commercials as such measures become possible with digital distribution of television.     

Forecasting US bond default ratings allowing for previous and initial state dependence in an ordered probit model

In this paper we investigate the ability of a number of different ordered probit models to predict ratings based on firm-specific data on business and financial risks. We investigate models which are based on momentum, drift and ageing, and compare them with alternatives which take the initial rating of the firm and its previous actual rating into account. Using data on US bond issuing firms, as rated by Fitch, over the years 2000 to 2007, we compare the performances of these models for predicting the ratings both in-sample and out-of-sample using root mean squared errors, Diebold-Mariano tests of forecast performance and contingency tables. We conclude that both initial and previous states have a substantial influence on rating prediction.