Market share of the rating agencies 

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Context 1

... rating agencies assess the relative credit risk. Currently, a number of such companies operate in the market. For example, according to the list of registered and certified rating agen- cies (2012/C 33/08), 29 rating agencies (RPEiR, 2009) currently function in the market. The most important ones are S&P, Moody`s, and Fitch. The total share of these three agencies in the global market is 90%, which is illustrated in figure 1. Therefore, the article is devoted to these three rating agencies. One of the main goals of risk assessment by way of rating is to strive at harmonising market information, which is usually divergent and asymmetrical. However, it is not an easy task, which proves the fact that the values of rating scores given by the particular rating agencies are not identical (Langhor & Langhor, 2008). The rating agencies and their impact on the economies of countries and companies have been the subjects of many studies and publications. Particular attention was given thereto after 2008, when their reliability was examined (Mathis et al., 2009). One of the bases of such activities were doubts and objections regarding the very procedure of giving rating scores where the costs are covered by the issuer and not the investor interested in valuation. The situation forces us to give serious thought to the level of independ- ence of the rating agencies ( Bonsall IV, 2014). The authors John (Xuefeng) Jiang, Mary Harris Stanford, and Yuan Xie show that the adopted rule, according to which the issuer pays for the rating score, causes an increase of the rating score of a company ( Jiang et al., 2012). The rating score of a company may also be given in the event when a given company did not request the same. As it turns out, the markets react to such information (usually in a negative manner) pro- vided that the rating score was not based on public financial data (Behr & Güttler, 2008). Winnie P.H. Poon shows that the rating scores of companies which did not request the same are lower than in the case of the companies which requested such a rating, even when considering the rat- ing score of a country and key financial features (Poon, 2003). The article: "Rating as a Useful Tool for Credit Risk Measurement" presents the procedure of giving a rating score based on the financial statements of companies ( Weissova et al.,2015). It was also shown that companies were trying to run their businesses in such a manner as to influence the received rating score ( Alissa et al., 2013). The authors John R Graham and Campbell R Harvey decided that apart from the assessment of the financial liquidity of an economic entity, in the policy of shaping the structure of the company's capital (debt management), the risk assessment level in the form of a rating score was also important ( Graham and Harvey, 2001;Graham et al., 2005). It was also stated that the capital structure of the companies adapted more quickly in more developed countries (Huang and Shen, 2015). In addition, it was shown that the rating score was an important factor influencing the manner of managing an enterprise (corporate governance) ( Bereskin et al., 2015;Ashbaugh-Skaife et al., 2006). The rating score given by the agencies may impact not only the enterprise which receives it, but also the industry in which it operates (suppliers and recipients of a given company in both the vertical and horizontal structure) ( Chang et al., 2015). The authors Tyler R. Henry, Darren J. Kisgen and Juan (Julie) Wu noticed that the reduction of share prices translated into lower rating scores of particular companies, whereas increased rating scores had no significant impact on the change of share prices of the assessed company ( Henry et al., 2015). The studies concerning the correlation between the rate of return for shares and credit risk level allowed to observe certain anomalies. Usually, if the risk is high, the investors expect a higher rate of return in exchange for assuming the risk, whereas in the case of lower risk, it is possible to expect that the rates of return shall be lower. The studies conducted by Emawtee Bissoondoyal-Bheenick and Doron Avramov show that the above-mentioned rule is not confirmed in the case of Australian, Japanese and American markets (Bissoondoyal-Bheenick, 2015;Avramov et al., 2009). Furthermore, it was shown that the forecast rating has a very strong impact on the bond and share market (Pukthuanthong-Le et al.,2007;Hooper et al., 2008), as well as on the companies outside a given country (Gande & Parsley, 2005;Ferreira & Gama, 2007;Ismailescu & Kazemi, 2010). Within the framework of research into the signs (forecast) of rating levels of particular companies, it was also stated that they may help to predict a difficult situation in the company even one year before (Sy, ...