Doing well by doing good
: the relationship between credit ratings and corporate governance : a study on U.S. firms

  • Margarida Correia Frango (Student)

Student thesis: Master's Thesis


Corporate governance has become a topic of increasing relevance. In this dissertation, it is investigated whether stronger governance leads to higher credit ratings. In this thesis, two different steps are taken. Firstly, the impact of Refinitiv’s Data stream ESG Scores’ Governance Pillar Score variable on the credit rating of a firm is studied. The results indicate that credit rating agencies tend to award higher ratings to firms with better governance performance. These results were obtained after controlling for firms’ key characteristics, making them robust. Additionally, the methodology is in line with previous literature. Afterwards, the impact of specific governance measures is also analyzed. Here, the results are not significant. Overall, these results suggest that there is important non-financial information on governance performance that rating agencies use in their evaluation of the creditworthiness of a firm. As a result, a company that presents stronger governance can have lower financing costs resulting from higher credit ratings.
Date of Award28 Jan 2022
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorDiana Bonfim (Supervisor)


  • Corporate governance
  • Credit rating
  • Credit risk


  • Mestrado em Finanças

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