Do Multiple Credit Ratings Reduce Money Left on the Table? Evidence from U.S. IPOs

57 Pages Posted: 22 Apr 2019 Last revised: 13 Jul 2021

See all articles by Marc Goergen

Marc Goergen

IE Business School, IE University; European Corporate Governance Institute (ECGI)

Dimitrios Gounopoulos

University of Bath

Panagiotis Koutroumpis

Queen Mary University London; Georgia Institute of Technology

Date Written: December 29, 2020


Using credit ratings as an uncertainty-reducing mechanism, we provide evidence of the beneficial impact of multiple credit ratings on reducing IPO underpricing and filing price revision. We find that the acquisition of multiple ratings in the pre-IPO period mitigates uncertainty more than the acquisition of a single rating. Multi-rated firms also have higher probabilities of survival than those with a single rating, whereas credit rating levels matter only for IPOs with more than one rating. The IPOs that are awarded the first rating on the borderline between investment and non-investment grades are more likely to seek an additional rating.

Keywords: Initial public offerings (IPOs); credit ratings; IPO underpricing; survivorship

JEL Classification: G10, G14, G39

Suggested Citation

Goergen, Marc and Gounopoulos, Dimitrios and Koutroumpis, Panagiotis, Do Multiple Credit Ratings Reduce Money Left on the Table? Evidence from U.S. IPOs (December 29, 2020). Journal of Corporate Finance, Vol. 67, 2021, 101898, Available at SSRN: or

Marc Goergen

IE Business School, IE University ( email )

Finance Department
Maria de Molina, 12
Madrid, 28006


European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels


Dimitrios Gounopoulos (Contact Author)

University of Bath ( email )

School of Management,
Wessex House, Claverton Down
Bath, BA2 7AY
United Kingdom

Panagiotis Koutroumpis

Queen Mary University London ( email )

Office GC 3.32
Graduate Centre, Mile End Campus
London, E14NS
United Kingdom
02078825872 (Phone)


Georgia Institute of Technology ( email )

Atlanta, GA 30332
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics