Testing the Effects of Sale Method Restrictions in Municipal Bond Issuance: The Case of New Jersey
- Topics:
- Assessment
- Tags:
- Finance,
- Social Science Electronic Publishing Inc.,
- Sales Strategy,
- Sales Force Management,
- Sales,
- New Jersey,
- Municipal Bond,
- Free Trade,
- Financial Planning,
- Taxes
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Overview: Can state governments save money by restricting the practice of selling tax-exempt bonds through negotiation, or do such regulations impose additional costs? Circumstances in New Jersey recently created a natural experiment to test this proposition. This study finds significant cost savings for those issues sold through competition both before and after such restrictions were put in place. All else equal, issues sold competitively after the policy change did not have significantly higher interest costs, despite a shift in volume toward competitive sales, suggesting that there exists room for increased use of competitive sales without incurring a cost penalty.
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Format: HTML | Date: Jan 2003 | Pages: 1
