The Determinants of Credit Rating: Brazilian Evidence

Résumé 0

"This st udy a ttempts to identify the determinant factors of credit rating in Brazil. The relevance of this proposal is based on the importance of the subject as well as the uniqueness of the Brazilian market . As for originality, the great majority of previous stud ies regarding credit rating have been develo ped in the US, UK and Australia; therefore the effect on other markets is still unclear, especially in emerging markets, like Brazil. W e ’ve used a Generalized Estimating Equations (GEE) model consider ing a panel structure with a categorical dependent variable ( credit rating ) and ten independent variables : leverage, profitability, size, financial coverage , growth, liquidity, corporate governance, control, financial market performance and internationalization. The s ample consisted of 153 rating observations during the period of 1997 - 2011 for a total of 49 public firms operating in the Brazilian Market. Results showed that leverage and internationalization are significant at the 1% level in explaining credit rating. P erformance in the financial market was significant at a 5% level ; profitability and growth were also statistically sig nificant, but at a 10% significance level."