Investor Payment Model To Improve Conflict Of Interest In Credit Rating

In recent years,China's financial industry has developed significantly,and corporate financing needs have continued to rise.The issue of corporate bonds has been a major development in the capital market.The credit rating of credit bonds is the main way for investors to understand bond qualifications.Therefore,the development of credit rating agencies is closely related to the development of the credit bond market.Its main role is to provide investors in the market with objective and real information about bond issuers.As of 2019,China has more than a dozen large-scale rating agencies in the market,and the number of companies covered by ratings is also increasing.Although the rating agencies have a certain market size,they still lack large-scale rating agencies that are authoritative,socially credible,and objective and fair.For rating agencies,the release of fair and truthful rating information is an important factor for their long-term sustainable development,but the regulatory effect of rating agencies on their own conflicts of interest has not been obvious.The issue of conflicts of interest of rating agencies under the issuer payment model has been controversial.This article first reviews relevant domestic and foreign literature,and summarizes credit rating related research from credit rating influencing factors and rating effectiveness.The research shows that corporate financial and accounting information,corporate nature,and bond characteristics all significantly affect bond credit rating results;many domestic Scholars believe that credit ratings have a certain effect on the development of bond markets,investor behavior,and the stability of financial markets.Then,the research results of domestic and foreign scholars are summarized from the perspective of credit rating payment model and credit rating information quality.Most of the research results show that the issuer payment model rating agency will cause the rating market to appear falsely high,and the investor payment model rating agency exists.Can significantly improve the quality of rating market information.Scholars at home and abroad hold different views based on the research of different payment models.Some scholars believe that it is difficult for investors to pay to overcome the problem of higher costs,and some scholars criticize the issuer's payment model from the perspective of theoretical analysis.There are also a few scholars who believe that the payment model of rating agencies should be enriched.Then the empirical analysis is carried out on the rating data of fixed-rate corporate bonds and corporate bonds issued from January 1,2011 to December 31,2019.Among them,for empirical needs,the rating results are quantified;first,through the collection of The data are descriptive statistics,and the results show that the rating results of the investor payment model rating agency are two levels higher than the issuer payment model rating agency rating,and the investor payment model rating agency coverage is relatively uniform in each rating.The rating results of the issuer's payment model rating agency on the enterprise as a whole are significantly higher than those paid by investors.Model 1 uses the quantitative quantification results of the two payment modes as the explanatory variables,the financial status of the company to be rated and the characteristic data of the bonds issued as the explanatory variables,and the company's nature information as the control variables for the rating agencies under the two payment modes.Do multiple regression fitting of the rating information of the company,and compare the difference between the rating results of the two payment models on the financial situation of the company and the bond characteristics.Multiple linear regression results show that under the investor payment model,the rating agency 's rating information fits better with the company 's financial situation and the quality of the rating is higher,so it can better reflect the real situation of the company;combined with the above descriptive statistical analysis,we can see that the issuer paid The rating information has a false high rating phenomenon.Further,the reasons for the false high ratings of the issuer's paid model rating agencies are explored.The research results show that the reason for the false high ratings may be caused by the "rating purchase" phenomenon in the issuer's paid rating agency's rating model.The worse the rating company,the more obvious the phenomenon of rating purchase,which further shows that the rating agency under the investor payment model is more conducive to improving the conflict of interest in the rating.Model 2 is empirically regressed in two and three times.The first model results show that the coverage of the investor payment model rating agency in the previous previous rating has significantly affected the rating results of the issuer payment model rating agency;further,to explore investors Whether the payment model rating agency 's rating result can suppress the issuer 's payment model 's rating high.Take the issuer 's payment model rating agency 's rating result as the explanatory variable,use the rating agency 's rating difference between the two rating models as the explanatory variable,and take the company 's finance The data and bond characteristic data are regressions of control variables and control variables of the nature of the enterprise.To avoid multicollinearity,a two-stage multivariate linear regression model is used for fitting.The regression results show that the existence of investor payment model rating agencies significantly inhibits the issuer's payment rating agencies' falsely high ratings,and the larger the rating differences,the more significant the inhibitory effect.Finally,this paper uses bond spreads as the explanatory variables,issuer pay rating agency rating results and the two payment model rating differences as explanatory variables,and other factors as control variables.Two-stage regression analysis is performed.The results show that investor pay rating agencies.The existence of significantly improved conflicts of interest in the rating market has provided investors with more comprehensive rating information.Finally,based on the empirical results,relevant suggestions are made to China's credit rating industry.First,rating agencies can enrich their business models and income sources while increasing their market competitiveness while performing ratings strictly in accordance with rating standards.Regulators should also improve the punishment of rating agencies Measures to encourage the development of investor payment model rating agencies,improve conflicts of interest in credit ratings,and promote the efficiency of the bond market.