부정적 등급전망 기업의 경영자 인센티브가 원가행태 및 신용등급에 미치는 영향

This study examines the impact of a negative credit outlook on the company’s cost behavior. A negative credit outlook which may lead to a future credit rating downgrade indicates a situation in which a credit rating agency must closely review uncertain changes related to a company’s credit risk to assess the need for an appropriate rating change. Under this situation, the company’s management may have an incentive to try to avoid a possible future credit rating downgrade. In this study, we empirically analyze whether companies with a negative outlook adjust their major costs in the direction of increasing earnings reported due to the incentives to obtain a more favorable rating. The results of this study will contribute to expanding the literature that explains managers’ incentives related to earnings management. Extension models of Anderson et al. (2003) were used to analyze changes of cost behaviors of Korean listed (KOSPI + KOSDAQ) companies with negative outlooks from 2003 to 2019. The results show that for companies with negative outlooks the asymmetries of selling, general, and administrative (SG&A) costs and cost of goods sold (CGS) decrease, but those of production costs increase. These findings indicate that negative outlook, which is dynamic credit information, creates incentives for managers to increase their reported earnings via altering the behaviors of these cost categories. We also found that cost adjustments by negative outlook companies successfully reduce the possibility of the next credit rating downgrades.