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A new study has made explosive claims about the world’s largest stock benchmark: Major U.S. corporations that purchase ratings from S&P Global Inc. have a higher chance of entering the S&P 500 Index -- even when they don’t meet all criteria for inclusion.
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“The S&P has likely exercised a nontrivial amount of discretion in deciding which firms to add to the index,” authors Kun Li and Xin Liu at ANU and Shang-Jin Wei at Columbia wrote in the study. “Data patterns suggest that the discretion is often exercised in a way that encourages firms to buy fee-based services from the S&P.”
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