Publication:
Should State Governments Prohibit the Negotiated Sales of Municipal Bonds?

Simple item page
dc.contributor.authorCestau, Dario
dc.contributor.authorGreen, Richard
dc.contributor.authorHollifield, Burton
dc.contributor.authorSchürhoff, Norman
dc.contributor.rorhttps://ror.org/02jjdwm75
dc.date.accessioned2025-04-24T13:07:03Z
dc.date.available2025-04-24T13:07:03Z
dc.date.issued2020-08-06
dc.description.abstractShould legislation ban the negotiated sales of municipal bonds? What are the costs of forcing public auctions? We compare the offering yields of local governments that are forced by state law to use public auctions to the offering yields of local governments that can choose between auctions and negotiated sales. Using a sample of 369,482 school bonds issued between 2004 and 2014, we find that a restriction on negotiated sales has a negative cost instead of positive. The prohibition benefits issuers on average. The offering yields of constrained issuers are 17 basis points lower than the offering yields of unconstrained issuers. The effect is equivalent to a rating upgrade from non-rated to AA-. Nevertheless, most issuers prefer to use negotiated sales even if they do not maximize bond proceeds.
dc.description.peerreviewedyes
dc.description.statusPublished
dc.formatapplication/pdf
dc.identifier.citationCestau, D., Green, R. C., Hollifield, B., & Schürhoff, N. (2019). Should state governments prohibit the negotiated sales of municipal bonds?. Available at SSRN 3508342. http://dx.doi.org/10.2139/ssrn.3508342.
dc.identifier.doihttp://dx.doi.org/10.2139/ssrn.3508342
dc.identifier.urihttps://hdl.handle.net/20.500.14417/3758
dc.language.isoen
dc.publisherSSRN
dc.relation.departmentFinance
dc.relation.entityIE University
dc.relation.schoolIE Business School
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/deed.en
dc.subject.keywordPrimary market
dc.subject.keywordState laws
dc.subject.keywordBook building
dc.subject.keywordAuctions
dc.subject.keywordMunicipal bonds
dc.titleShould State Governments Prohibit the Negotiated Sales of Municipal Bonds?
dc.typeinfo:eu-repo/semantics/workingPaper
dc.version.typeinfo:eu-repo/semantics/publishedVersion
dspace.entity.typePublication
relation.isAuthorOfPublication9305e847-1b1f-459c-a881-7cfaca868a1f
relation.isAuthorOfPublication.latestForDiscovery9305e847-1b1f-459c-a881-7cfaca868a1f
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
Should State Governments Prohibit the Negotiated Sales of Municipal Bonds.pdf
Size:
741.86 KB
Format:
Adobe Portable Document Format
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
2.83 KB
Format:
Item-specific license agreed to upon submission
Description:
Download
Collections
Working Papers