Proceedings of 26th International Business Research Conference
7 - 8 April 2014, Imperial College, London, UK, ISBN: 978-1-922069-46-7
Managers’ Commitment to Voluntary Disclosure to Influence
Credit Ratings
HE, Guanming
This study investigates whether and how managers commit to voluntary disclosure to influence
credit ratings. I find that firms near a credit rating change have a higher incidence of product and
business expansion information disclosure. This finding is more evident for firms that are subject to
lower proprietary costs of the disclosure, which implies that manager trades off both the benefits
and the costs of increased nonfinancial disclosure in response to an impending credit rating change.
I find no evidence that firms close to a rating change selectively release good news or suppress bad
news on their product and business expansion information. Overall, my results suggest that firms
generally exhibit a credible commitment to increasing disclosure transparency for a desired credit
rating. Further analysis reveals that an increase in the nonfinancial disclosure raises the likelihood
of a rating upgrade in the subsequent period.
Keywords: Credit rating, Commitment, Voluntary disclosure
JEL Classifications: M41 G24
_______________________________________________________________________

Guanming HE, University
guanming.he@wbs.ac.uk
of
Warwick,
United
Kingdom
Tel.:
0044-7570184501.
Email: