Browsing by Author "Benzarti, Mohamed Youssef"
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- The effect of credit rating changes on firms’ leverage : US firms between 2009 and 2017Publication . Benzarti, Mohamed Youssef; Meira, MárioThis dissertation examines the effect of a change in credit rating on firm’s Leverage decisions. I find that firms tend to undertake strong capital market activities immediately after the 2008 financial crisis, by reducing their issuance of debt in the aftermath of a downgrade. I also find that firms with higher credit ratings have less debt and more equity when compared to firms that have lower credit ratings. Firms issue approximately less 3 percentage points of debt following a downgrade, whereas upgraded firms issue more debt, following the change in their credit rating.