Market Efficiency Of Credit Rating Industry In SCP Paradigm

Though the financial crisis and European debt crisis has in the past few years, but theaftershocks of the crisis has long faded, the world economy still maintained asustained downturn. In depth discussion of the cause of the crisis, many scholarsbelieve that as a "gatekeeper" in financial markets, the credit rating agency fails tocarry out its own effective responsibility is one of the most important reason of thehappen and spread of the crisis. So, the further research of credit ratings marketstructure is necessary.This article introduces the relevant theories of credit rating from the basic theory ofcredit rating and international well-known three major rating agencies. Then use theSCP paradigm analysis frame of modern industrial organization theory to study themarket structure and efficiency of the international credit ratings industry, and madeempirical analysis on the relationship between with. First, analyze the marketstructure of rating industry in detail from the market concentration, barriers to entry,then introduce the behavior of rating agencies and the result of the behavior, Thenmake empirical analysis on the relationship between market structure and theefficiency of the rating, the following conclusions: credit ratings rating efficiency andmarket concentration has significant negative correlation relationship, the positivecorrelation between market share and rating efficiency, but not significant correlation,it states that international credit rating market concentration is too high that has madeits rating efficiency declined, but can improve efficiency by increasing market shareof the rating agencies. Finally for the development of credit rating industry of ourcountry, put forward to improve market concentration, strengthening the constructionof laws and regulations and supervision, efforts to the development of national brandssuch as policy recommendations.