Tiebreaker: Certification and multiple credit ratings
The Journal of Finance , Volume 67 - Issue 1 p. 113- 152
This paper explores the economic role credit rating agencies play in the corporate bond market. We consider three existing theories about multiple ratings: information production, rating shopping, and regulatory certification. Using differences in rating composition, default prediction, and credit spread changes, our evidence only supports regulatory certification. Marginal, additional credit ratings are more likely to occur because of, and seem to matter primarily for, regulatory purposes. They do not seem to provide significant additional information related to credit quality.
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Bongaerts, D.G.J, Cremers, K.J.M, & Goetzmann, W.N. (2012). Tiebreaker: Certification and multiple credit ratings. The Journal of Finance, 67(1), 113–152. doi:10.1111/j.1540-6261.2011.01709.x