Journal Articles

Permanent URI for this collectionhttps://mro.massey.ac.nz/handle/10179/7915

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Author: search.filters.author.Pham MHSubject: search.filters.subject.Credit ratings

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    Climate change and corporate creditworthiness: International evidence
    (Elsevier Inc, 2025-03-01) Nguyen H; Pham AV; Pham MDM; Pham MH
    This study examines how climate change risks affect corporate credit ratings worldwide. Using a comprehensive dataset of 4427 firms across 60 countries, we find that firms in countries more susceptible to climate change receive lower credit ratings. Such a negative relation ensues from inferior firm fundamentals, such as higher default risk and cash flow volatility associated with climate-change-related uncertainties. We also find that the adverse impact of climate change risks on credit ratings impedes firms' access to debt financing and increases the costs of holding credit default swaps. Further analyses reveal that institutional factors and market attention to climate change significantly shape rating agencies' responses to climate change risks.
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    Credit risk assessment and executives’ legal expertise
    (Springer Science+Business Media, LLC, 2023-12) Pham MH; Merkoulova Y; Veld C
    We study whether firms that are led by chief executive officers (CEOs) with law degrees (lawyer CEOs) have different credit ratings and costs of debt from other firms. Our sample consists of Standard & Poor’s 1500 firms from 1992 to 2020, 9.2% of which have lawyer CEOs. We find that these firms have better credit ratings, compared to other firms. On average, their cost of debt is 10% lower than that of firms led by CEOs without legal backgrounds. Our results are robust to different specifications, sampling methods, and controls, such as firm and CEO characteristics. We identify two ways that CEO expertise translates into higher credit ratings: lawyer CEOs are associated with a lower future volatility of stock returns and a reduction in information risk. The decreased business risk and better financial reporting are associated with 5% lower auditing fees for firms with lawyer CEOs.