Is The Credit Rating Agency Performing Its Supervisory Duties?

In order to change the long-standing deficiencies in the direct financing channels,the Third Plenary Session of the 18 th CPC Central Committee put forward the "Decision of the Central Committee of the Communist Party of China on Comprehensively Deepening the Reform of Some Major Issues",clearly emphasizing that it is necessary to further promote the development of the bond market and increase the proportion of direct financing.The development of the bond has undergone earth-shaking changes.Subsequently,the state has promulgated a number of policies to promote and guide the development of the bond market.In recent years,the types of bonds,debt issuers,and circulation have risen rapidly.However,while the bond market is developing rapidly,the quality of bonds is not satisfactory,as evidenced by the increasing number of defaults in recent years.This paper attempts to explore the current accountability of credit rating agencies as third-party supervisors in the bond market.This paper takes the main body of bond issuance data of listed companies in2011-2017 as a research sample.By investigating the impact of corporate tax avoidance on bond credit rating,this paper studies the credit as a third-party supervisor in the context of the rapid development of the bond market but frequent defaults.The rating agencies are responsible for the responsibility and quality of their duties,and further research on the differences in supervision and economic consequences under different scenarios.This paper finds that the higher the tax avoidance of enterprises,the lower the bond credit rating;this relationship is more significant in the context of local supervision and local credit rating agencies,and will be weakened when the rated enterprises are state-owned;however,this effect is critical.Point,when the degree of corporate tax avoidance is high,the credit rating agency will respond.The robustness of the conclusions of this paper is verified by the robustness test and the additional test,and the downgrading,post-test and economic consequences of the credit rating are discussed.It proves that China's credit rating agencies can perform their own supervisory functions,and such supervision is dynamic,adjustable,and sensitive.Starting from the issue of the responsibility of credit evaluation agencies,this paper takes corporate tax avoidance behavior as the research point of view,enriches the literature on corporate tax avoidance risk and credit rating,and helps relevant departments to formulate corresponding policies to regulate market subject behavior and improve market functions.