The effects of credit rating assessments by international ratingagencies on foreign direct investment

Credit rating is the measurement and estimation of a company or country's economic and financial obligations in a timely and complete manner in accordance with financial data. As a result of the credit rating process, the company or the country is given a credit rating and risk situations are estimated. Foreign direct investment is a long-term investment in the real sector which the investor realizes in a country different from its own and dominates the management. They want to be informed about companies or countries in order to invest directly in foreign capital. It meets this demand thanks to the credit ratings given by credit rating agencies. Foreign capital determines the investment decision by examining the credit ratings expressed in letters and numbers. In this study, the definition, characteristics, methods, factors affecting the rating, the benefits of the rating and the criticisms directed to the rating are examined theoretically. Moody's, S&P, Fitch and JCR credit rating agencies are explained in detail. The relationship between credit ratings and direct foreign capital investments and the effects of credit ratings on direct foreign capital investments were investigated. Turkey, Greece, Portugal, Spain, Italy and the BRICS (Brazil, Russia, India, China and South Africa) were compared directly to those countries with foreign investment that the country's credit ratings. Empirical evaluation of how credit ratings affect foreign direct investment . Credit notes, which are expressed in letters and notes, have been converted into hundred numerical system according to KÜDİ system for clarity. KÜDİ points score using data on foreign direct investment in Turkey, Greece, Portugal, Spain, Italy and the BRICS (Brazil, Russia, India, China and South Africa) countries analyzed by the Kónya Boostrap Panel Causality Test. According to the results of the test, credit ratings given to Greece, Portugal, Spain, Italy, Brazil, India and South Africa do not affect foreign direct investment. China, Russia, and Turkey issued credit notes has an impact on foreign direct investment.