Shiva Rajgopal

A new study concludes that Moody’s gave significantly higher ratings on bonds and derivatives issued by companies in the investment portfolios of its two largest shareholders, including Warren Buffett’s Berkshire Hathaway and took longer to downgrade them than its rival Standard & Poor’s.

The study joins a large body of literature probing the effects of ownership on supposedly objective businessdecisions, including how managers cater to activist investors who buy large stakes in their companies. It doesn’t prove analysts at Moody’s deliberately fiddled with the ratings on companies owned by its owners, said co-author Shivaram Rajgopal of Emory University’s Goizueta Business School, “but there’s a lot of statistical smoke.”

About the Professor

Shivaram Rajgopal joined Goizueta Business School in June 2010. Prior to joining Emory he was a chaired professor in the Foster School of Business of the University of Washington. Shiva’s research focuses in two areas: the investigation of the determinants and consequences of financial reporting strategies, and the exploration of the relationships between executive compensation (stock options) and the executive behavior such as risk taking.