Dr Xinyu Yu

This study examines the impact of credit ratings on the efficiency of firms' investments. Using a large sample of US firms, we find a positive relationship between the existence of credit ratings and investment efficiency. The cross-sectional analyses show the positive relationship is more pronounced for firms with greater information asymmetry and weaker corporate governance. Our results are robust to different methods to address potential endogeneity concerns, alternative measures of key variables, and the inclusion of additional control variables. Overall, the findings support the notion that credit rating agencies enhance information transparency and external monitoring, thereby allowing rated firms to promote investment efficiency. The findings contribute to our understanding of the significant role played by credit rating agencies in shaping firms' investment behaviour and efficiency.

This study examines the impact of credit ratings on the efficiency of firms'investments. Using a large sample of US firms, we find a positive relationshipbetween the existence of credit ratings and investment efficiency. The cross-sectional analyses show the positive relationship is more pronounced for firmswith greater information asymmetry and weaker corporate governance. Ourresults are robust to different methods to address potential endogeneity con-cerns, alternative measures of key variables, and the inclusion of additionalcontrol variables. Overall, the findings support the notion that credit ratingagencies enhance information transparency and external monitoring, therebyallowing rated firms to promote investment efficiency. The findings contributeto our understanding of the significant role played by credit rating agencies inshaping firms' investment behaviour and efficiency.

In this paper, we investigate the impact of government control on investors’ valuation of cash held by listed firms in China. We find strong and robust evidence that government control leads to a lower value of cash. Further evidence suggests that this negative impact is associated with significant agency costs of political expropriation rather than low financial constraints of the soft-budget effect. Moreover, our extended analyses reveal that the negative impact of government control on the value of cash depends on regional institutional development. In particular, in regions with high institutional development, government control reduces the value of cash, while in areas that are less developed, this negative impact is attenuated to some extent. Overall, our findings shed new light and add a further dimension to the literature, broadening our understanding of the impact of government intervention on the listed firms under its control.