IDEAS home Printed from https://ideas.repec.org/a/bla/pbudge/v38y2018i2p81-110.html
   My bibliography  Save this article

The Effect of Sale Methods on the Interest Rate of Municipal Bonds: A Heterogeneous Endogenous Treatment Estimation

Author

Listed:
  • Gao Liu

Abstract

Conventional wisdom argues that competitive bidding, compared to negotiated sale, can reduce the interest cost of municipal bonds in the primary market. Studies correcting for self†selection bias have mixed findings. However, these studies are subject to some potential methodological issues. This study circumvents these pit†falls and provides an estimate of the heterogeneous average treatment effect (ATE). After correcting for the endogeneity bias of sale method and its interaction effect, on average competitive sale still significantly lowers the interest rate, but the interest cost advantage decreases as issuer experience increases.

Suggested Citation

  • Gao Liu, 2018. "The Effect of Sale Methods on the Interest Rate of Municipal Bonds: A Heterogeneous Endogenous Treatment Estimation," Public Budgeting & Finance, Wiley Blackwell, vol. 38(2), pages 81-110, June.
    • Handle: RePEc:bla:pbudge:v:38:y:2018:i:2:p:81-110
    DOI: 10.1111/pbaf.12174
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/pbaf.12174
    Download Restriction: no
    File URL: https://libkey.io/10.1111/pbaf.12174?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lang (Kate) Yang & Ruth Winecoff, 2022. "Municipal bond sectoral risk and information intermediation in uncertain times: Evidence from the Covid‐19 pandemic," Public Budgeting & Finance, Wiley Blackwell, vol. 42(4), pages 34-53, December.
    2. Sreèko Devjak, 2020. "Integrity of the benchmark price for price testing of US municipal bonds," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 38(1), pages 215-235.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:pbudge:v:38:y:2018:i:2:p:81-110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0275-1100 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.