This study examines the relationship between firms’ political sentiment (PSENT) and their credit ratings. Using US public firms as the sample, we reveal that PSENT is positively associated with corporate credit ratings. Furthermore, we find evidence indicating that a positive PSENT leads to higher credit ratings, while a negative PSENT results in lower credit ratings. We also demonstrate that PSENT is positively (negatively) associated with the investment grade and rating upgrade (rating downgrade). The cross-sectional analysis indicates that the positive relationship between PSENT and credit ratings is more evident among firms facing severe information asymmetry, financial distress risk, and weaker governance. Additionally, we observe that PSENT leads to higher new debt issuance. Finally, we conduct a survey of credit analysts and find evidence that corroborates our findings from empirical analyses. Overall, our study suggests that PSENT has an essential bearing on corporate credit quality.

中文翻译：

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政治情绪和信用评级


本研究探讨了企业的政治情绪 (PSENT) 与其信用评级之间的关系。以美国上市公司为样本，我们发现 PSENT 与企业信用评级呈正相关。此外，我们发现证据表明，正的 PSENT 会导致较高的信用评级，而负的 PSENT 会导致较低的信用评级。我们还证明 PSENT 与投资评级和评级上调（评级下调）呈正（负）相关。横断面分析表明，在面临严重信息不对称、财务困境风险和治理薄弱的企业中，PSENT 与信用评级之间的正相关关系更为明显。此外，我们观察到 PSENT 导致新债发行量增加。最后，我们对信用分析师进行了调查，并找到证据证实我们的实证分析结果。总体而言，我们的研究表明 PSENT 对企业信用质量具有重要影响。