Significance of Financial and Non Financial Information on Credit Rating: An Empirical Study on Banking and Insurance Sectors of Pakistan

  • Muhammad Khalid Rashid Government College of Science, Lahore, Pakistan
  • Muhammad Noor ul Haq School of Accountancy & Finance, The University of Lahore, Lahore, Pakistan
  • Umair Khalid School of Accountancy & Finance, The University of Lahore, Lahore, Pakistan
  • Abdul Basit Lahore Institute of Science & Technology, Lahore, Pakistan
Keywords: Financial and non-financial Sector, Credit Rating, Financial and non-financial Information

Abstract

Purpose: Apart from standard spheres of financial institutions’ performance such as asset quality, profitability, liquidity and efficiency; the study investigates the influence of non-financial factors such as governance and management.

Design/Methodology/Approach: This study utilizes 2009 through 2018 data for the sample of commercial banks and insurance companies of Pakistan to analyze the significance of financial and non-financial information on credit rating. The study is done by employing frequently used Fully Modified Ordinary Least Square (FMOLS).

Findings: The main contribution lies including explanatory variables from various areas that have an impact on the financial position of the examined banks and insurance companies.

Implications/Originality/Value: The obtained results suggest that the combined use of financial and non-financial information tends to a significant impact on credit rating.

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Published
2021-09-30
How to Cite
Rashid, M. K., Haq, M. N. ul, Khalid, U., & Basit, A. (2021). Significance of Financial and Non Financial Information on Credit Rating: An Empirical Study on Banking and Insurance Sectors of Pakistan. Journal of Accounting and Finance in Emerging Economies, 7(3), 757-765. https://doi.org/10.26710/jafee.v7i3.1986