The role of credit ratings on capital structure and its speed of adjustment: preliminary evidence from 19 countries

In this study we examine the role of external corporate credit ratings in explaining leverage and the speed of adjustment using an international dataset. We find that the impact of credit ratings (CRs) on firms’ capital structures is more significant and negative in countries with more market-based (MB) oriented financial systems when quantified by a Financial Architecture variable (measuring the size, activity, and efficiency of a stock market...