Credit Ratings and Firm Life-cycle

Magnus Blomkvist, Anders Löflund*, Hitesh Vyas

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

11 Citations (Scopus)


Credit ratings display an inverse U-shaped relation over the corporate life-cycle. Firms’ likelihood to obtain a rating initially increases over the life-cycle as reputation increases and asymmetric information is reduced. As investment opportunities diminish during the shakeout and decline phases the benefit of having a rating decreases. The economic effect is substantial: transitioning from the introduction to the growth phase increases the rating likelihood from 6.7% to 30%.
Original languageEnglish
Article number101598
Peer-reviewed scientific journalEconomics Letters
Issue number5
Number of pages5
Publication statusPublished - 24.05.2020
MoE publication typeA1 Journal article - refereed


  • 512 Business and Management
  • credit ratings
  • life-cycle
  • corporate finance
  • dynamic resource based view

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance


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