Vivian van Breemen

162 4.5.2 Competition and rating standards Ti nh eTraeb laerse 4a. t4 l ea ansdt 4t w. 5o. Fc iarvset ,a ttsh er e igma rpdaicntg otfh ec oimn tpeer tpi rt ieot na t icoonu lodf bt he e oovue trcsot amt eeds br eepc raeusseenttha et i vsea mo fp lael lorf attreadn cthr aens cfho er swi hn i ct hh ewRe Mu Bs eS rma tai nr kgedt .i fSf eerceonncde, s t mh ea yp onsoitt ibv ee (anr iesgea twi vhee)nr et lhaet i oC nR Ab eat pwpel ei ens mt iagrhkt ee tr s(hl oaor es eor f) Cr Ra tAi ns ga ns tda nr adtai nr dg sd ai fsf eirt e hn ac se shci go hu el dr (lower) market powers in the first place. Meaning, the relation could be due to wf r oo mr s et h(eb semt t ea rl l) CrRa At i sn g( Bs af er oemt atl h. , e2 0l a1r9g)e. TCoRaAdsdrraetshs etrh et hi sa snu be ,ewt t ee rr u( wn oo rr sdee)r erda tlionggist rme ag rr ke es st isohnasr et os omf ei tass cuor me hp oe twi t oCrRs A( ’Es qr ua at itni og nsst a4n. 2d taor d4s. 4v) a. Tr yh ewri et hs uhl it gs haer re ap nr eds leonwt eedr in Tables 4.6 and 4.7. The ordered logit model has been extensively used in the l2it0e1r3a;tuBraeeteotidale.,n2ti0f1y9c)h.anges in rating standards (see e.g., Blume et al., 1998; Alp, In Table 4.6, we use DBRS’ and KBRA’s rating as the dependent variable and the mI n aor uk er trsehg ar er es soi of nl a rmg oe dCeRl Ai n( MP aonoedl yA’ s, awned uSs&e Pt)h ae s stahme pkleey oi fn da lel pt er an nd cehnet sv ar ar it ae bd l ebsy. DBRS (columns 1 to 4), irrespective of whether they are rated by another CRA. We also do this for KBRA (columns 5 to 8). To control for the determinants of credit ratings, we include the following variables: Number of Ratings, Tranche Count, Subordination Level, Log Tranche Value, Log Transaction Value, Top Ten Issuer, and Coupon. We also include year dummy variables and control for the country in which the collateral is located. All variables are explained in detail in Section 4.3. In Table 4.6, a statistically significant negative coefficient for our market share measures, MS Moody’s by Frequency and MS S&P by Frequency, indicates that the small CRA loosen its rating standards with higher market share of the larger CRA. An insignificant coefficient suggests that the market share of

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