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Does Market Performance (Tobin’s Q) Have A Negative Effect On Credit Ratings? Evidence From South Korea

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  • Hyoung-Joo Lim

    (Kyonggi University)

  • Dafydd Mali

    (University of Nottingham)

Abstract

Tobin’s Q is an established measure of firm performance, based on investor confidence. However, the association between Tobin’s Q and credit ratings is not well-established in the literature. Using a sample of Korean listed firms over the 2001–2016 sample period, Probit regression analysis shows that overall, Tobin’s Q is positively associated with credit ratings. However, for firms with a > 1 (1

Suggested Citation

  • Hyoung-Joo Lim & Dafydd Mali, 2024. "Does Market Performance (Tobin’s Q) Have A Negative Effect On Credit Ratings? Evidence From South Korea," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 31(1), pages 53-80, March.
    • Handle: RePEc:kap:apfinm:v:31:y:2024:i:1:d:10.1007_s10690-023-09406-x
    DOI: 10.1007/s10690-023-09406-x
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    More about this item

    Keywords

    Credit ratings; Tobin’s Q; Accounting education; Mispricing/overvaluation;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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