Research On The Impact Of Rating Agency's International Cooperation Background On Credit Rating And Corporate Finance Costs

China's bond market default is entering a period of high incidence.According to Wind data,a total of 56 and 34 bonds defaulted in 2016 and 2017,with default amounts of 39.377 and 31.249 billion yuan respectively;and in 2018 and 2019,the number of defaulted bonds surged to 125 and 179,with default amounts of 1209.61 respectively.144.408 billion yuan.Different from the past,the defaulting entities in the past two years are not lack of listed companies with high ratings,which can't help but think about whether China's credit rating is effective.Credit ratings are essentially estimates of the future default probability of bonds.Effective credit ratings should be able to contain information about corporate credit risk,thereby reducing information asymmetry between investors and issuers,and reducing the financing cost of issuing bonds.Due to the issuer's payment model in China's credit rating market,the phenomenon of rating purchases is very common,and China's regulatory requirements for bond issuance ratings have led to the upward distortion of China's credit rating.There is also a reputation mechanism that affects the behavior of credit rating agencies.Reputation can be understood as the reputation of credit rating agencies among investors.It is an intangible asset.In order to maintain credibility,rating agencies tend to give ratings that meet the credit risk of bonds.The effect of the above two factors on credit ratings is exactly the opposite.This article believes that different rating agencies have different motivations to maintain their reputation.The main consideration is whether there is cooperation with international rating agencies.At present,China's credit rating market is not open to the outside world.The reason for cooperation between foreign credit rating agencies and domestic institutions may be to prepare for entering the Chinese market,so they will pay more attention to the accumulation of reputation in the Chinese market,or through the practice of the Chinese rating market Experience to explore the differences between factors affecting credit ratings in the Chinese market and overseas markets,so as to enter the Chinese market in the future.Regardless of the motivation,the foreign cooperation background of credit rating agencies will have an impact on credit ratings.Assuming the above is established,and investors observe different credit ratings given by different types of rating companies,they will give different risk premiums to bonds given by different rating companies,which will affect the financing cost of bonds.This paper constructs an Ordered Probit model and a multiple regression model,using credit rating and corporate debt financing costs as explanatory variables,and whether the credit rating agency has an international cooperation background as a dummy variable,and puts it as an explanatory variable in the regression model.It was found that credit rating agencies with an international cooperation background had relatively low credit ratings and were able to reduce corporate financing costs.