Citations (1)



Revolving Doors on Wall Street

Jess Cornaggia

Georgetown University

Kimberly Rodgers Cornaggia

American University - Kogod School of Business

Han Xia

University of Texas at Dallas - Naveen Jindal School of Management

May 12, 2014

Credit analysts often leave rating agencies to work at firms they rate. These analyst transfers provide a unique laboratory for studying revolving door effects. Benchmark rating agencies provide counterfactuals which allow us to measure rating inflation in a difference-in-difference framework. We find that transitioning analysts become more favorable to their future employers prior to their transitions. Further, these conflicted ratings become less responsive to changes in market-based measures of hiring firms’ credit quality. Our results reveal the presence of previously untested forces that affect information production by credit analysts.

Number of Pages in PDF File: 56

Keywords: Credit Ratings, Capital Markets Regulation, Human Capital, Regulatory Capture, Revolving Door, Credit Analysts, NRSROs, Analyst Labor Market

JEL Classification: G14, G24, G28, G32

working papers series

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Date posted: September 23, 2012 ; Last revised: May 13, 2014

Suggested Citation

Cornaggia, Jess and Cornaggia, Kimberly Rodgers and Xia, Han, Revolving Doors on Wall Street (May 12, 2014). Available at SSRN: http://ssrn.com/abstract=2150998 or http://dx.doi.org/10.2139/ssrn.2150998

Contact Information

Jess Cornaggia
Georgetown University ( email )
3700 O Street, NW
Washington, DC 20057
United States
HOME PAGE: http://www.jesscornaggia.com
Kimberly Rodgers Cornaggia (Contact Author)
American University - Kogod School of Business ( email )
4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States
Han Xia
University of Texas at Dallas - Naveen Jindal School of Management ( email )
P.O. Box 830688
Richardson, TX 75083-0688
United States
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