Article ID: | iaor200437 |
Country: | United States |
Volume: | 15 |
Issue: | 2 |
Start Page Number: | 176 |
End Page Number: | 201 |
Publication Date: | Jan 2003 |
Journal: | Journal of Public Budgeting, Accounting and Financial Management |
Authors: | Danvers Kreag |
Keywords: | management, health services, finance & banking, statistics: regression |
This study examines rating agency explanations that accompany changes in credit ratings for nonprofit hospitals. A national sample of Standard & Poor's revision announcements is used to identify hospital characteristics that purportedly motivate credit rating changes. Significant differences in agency-cited performance dimensions, such as profitability, liquidity, service-mix, capital structure and market share, are observed across upward and downward revisions. The relative usefulness of these citations for explaining and classifying credit changes is also evaluated. The result suggest that agency explanations provide limited value relative to conventional, multivariate information sets.