THE EFFECT OF CREDIT RATING PROVIDENCE AND FIRM ATTRACTIVENESS ON FUNDRAISING SUCCESS: EVIDENCE FROM IPOS IN THAILAND

Abstract

 In a growth firm, an owner and a manager will perform their best to lead its growing firm to become “Maximize Wealth”. One way is popularity and useful is to put their shares into stock market as the initial public offerings (IPOs).  Despite the growing popularity of credit rating among various audiences, including potential funders, limited studies have investigated how firms can utilize credit rating to attract financial capital before and during the IPO process. This study utilizes the signaling theory and the credit rating literature to shed light on this issue. This study, based on financial data of 438 firms that went public in Thailand from 2008 to 2018, provides evidence in support of a positive relationship between credit rating providence and its IPO firm attractiveness. Furthermore, the effectiveness of a firm’s fundraising is also positive supported by firm attractiveness.