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Local Credit Rating Agencies: New Data and Analysis
Local credit rating agencies are an important phenomenon in emerging and high income economies. There are over 200 local agencies around the world, which provide ratings of small domestic enterprises and debt denominated in local currency. This work presents the first comprehensive collection of information and data on local agencies’ global presence, and on Moody’s, S&P and Fitch’s offices and affiliates around the world. The dataset includes agencies operating in over 60 countries between 1970 and 2012, providing the date of incorporation and death of the agencies, the geographic focus, and information on mergers between local agencies and acquisitions by Moody’s, S&P and Fitch. The paper also discusses and shows empirical evidence on the determinants of the presence of local agencies and global agencies’ branches. Results suggest the local agencies appear where securities’ markets are not much developed, often supported by governments committed to promote these markets. Global agencies open domestic branches where a rating business is guaranteed by relatively deep securities’ markets and good financial authorities.