Person:
Cestau, Dario

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Dario
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Cestau
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IE University
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IE Business School
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Finance
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End date: 2019 × Start date: 2019 ×

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Now showing 1 - 2 of 2
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    Publication
    Competition and Market Concentration in the Municipal Bond Market
    (SSRN, 2019-07-11) Cestau, Dario; https://ror.org/02jjdwm75
    Lack of competition among the underwriters of municipal bonds increases the borrowing costs of local municipalities. I find that the proportion of municipal bonds sold in competitive sales in the state has an economically significant effect on several measures of competitiveness. Competitive sales increase the number of active underwriters in the state and substantially decrease the concentration in the market for underwriting services for municipal bonds. I also find that state restrictions on the negotiated sale of municipal bonds can materially decrease market concentration. Market concentration has increased considerably over time, but only negotiated deals have contributed to greater concentration.
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    Publication
    Municipal Bond Markets
    (Anual Reviews, 2019-12) Cestau, Dario; Hollifield, Burton; Li, Dan; Schürhoff, Norman; https://ror.org/02jjdwm75
    The effective functioning of the municipal bond market is crucial for the provision of public services, as it is the largest capital market for state and municipal issuers. Prior research has documented tax, credit, liquidity, and segmentation effects in municipal bonds. Recent regulatory initiatives to improve transparency have made granular trade data available to researchers, rendering the municipal bond market a natural laboratory for the study of financial intermediation, asset pricing in decentralized markets, and local public finance. Trade-by-trade studies have found large trading costs, contemporaneous price dispersion, and other deviations from the law of one price. More research is required to understand optimal market design and the impact of post-crisis regulation, sustainability, and financial technology