IDEAS home Printed from https://ideas.repec.org/a/ers/ijebaa/vviiiy2020i3p326-334.html
   My bibliography  Save this article

Issuance of Municipal Bonds through Capital Markets as Financial Revenue for Regional Development

Author

Listed:
  • M.S. Tumanggor

Abstract

Purpose: This paper aims to identify and analyze the potential of regional sources, such as regional revenue or fund-lending institutions either coming from foreign or local investors to develop the regions in the state of Indonesia. Approach/Methodology/Design: This paper uses a normative research method that refers to legislation and regulations. Findings: The capital markets are expected to be the key for the regional development. This paper also describes how regional governments could raise funds through capital market instruments which are, municipal bonds and its derivatives. Municipal bond is a regional loan offered to the public through the Initial Public Offering mechanism in the Capital Markets. Practical Implications: As a consequence, the regional governments in Indonesia could minimize their dependence from the Central governments by issuing municipal bonds. This kind of borrowing could also support the Central Government to develop the national economy. Originality/value: This paper mainly explore another prospective source of funding for regional government which proved to absorb a sufficient amount of capital by using municipal bonds financing.

Suggested Citation

  • M.S. Tumanggor, 2020. "Issuance of Municipal Bonds through Capital Markets as Financial Revenue for Regional Development," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 326-334.
  • Handle: RePEc:ers:ijebaa:v:viii:y:2020:i:3:p:326-334
    as

    Download full text from publisher

    File URL: https://www.ijeba.com/journal/519/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Craig L. Johnson & Martin J. Luby & Tima T. Moldogaziev, 2014. "State and Local Financial Instruments," Books, Edward Elgar Publishing, number 15845.
    2. Metcalf, G.E., 1991. "The Role Of Federal Taxation In The Supply Of Municipal Bonds: Evidence From Municipal Governments," Papers 72, Princeton, Woodrow Wilson School - John M. Olin Program.
    3. Fortune, Peter, 1998. "Tax-exempt Bonds Really Do Subsidize Municipal Capital!," National Tax Journal, National Tax Association, vol. 51(n. 1), pages 43-54, March.
    4. Isabelle Joumard & Per Mathis Kongsrud, 2003. "Fiscal Relations across Government Levels," OECD Economic Studies, OECD Publishing, vol. 2003(1), pages 155-229.
    5. Slemrod, Joel & Greimel, Timothy, 1999. "Did Steve Forbes scare the US municipal bond market?," Journal of Public Economics, Elsevier, vol. 74(1), pages 81-96, October.
    6. Fortune, Peter, 1998. "Tax-Exempt Bonds Really Do Subsidize Municipal Capital!," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(1), pages 43-54, March.
    7. James M. Poterba & Kim Rueben, 1999. "State Fiscal Institutions and the U.S. Municipal Bond Market," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 181-208, National Bureau of Economic Research, Inc.
    8. de Mello, Luiz Jr, 2000. "Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis," World Development, Elsevier, vol. 28(2), pages 365-380, February.
    9. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas Luke Spreen & Ed Gerrish, 2022. "Taxes and tax‐exempt bonds: A literature review," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 767-808, September.
    2. Beata Guziejewska, 2015. "Designing A Revenue Structure In Local Self-Government Entities In Poland: Taxes Versus Grants," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 10(3), pages 45-63, September.
    3. Jorge Martinez-Vazquez & Violeta Vulovic, 2017. "How well do subnational borrowing regulations work?," Chapters, in: Naoyuki Yoshino & Peter J. Morgan (ed.), Central and Local Government Relations in Asia, chapter 5, pages 161-220, Edward Elgar Publishing.
    4. Smith, Heidi Jane M. & Revell, Keith D., 2016. "Micro-Incentives and Municipal Behavior: Political Decentralization and Fiscal Federalism in Argentina and Mexico," World Development, Elsevier, vol. 77(C), pages 231-248.
    5. Beata Guziejewska, 2014. "Intergovernmental Fiscal Relations. Theoretical Aspects And Poland’S Experience," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 9(3), pages 24-32, January.
    6. John Thornton, 2009. "On the relation between central and sub-national government fiscal balances," Applied Economics Letters, Taylor & Francis Journals, vol. 16(6), pages 603-608.
    7. Mandel Philipp & Süssmuth Bernd, 2015. "Public Education, Accountability, and Yardstick Competition in a Federal System," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1679-1703, October.
    8. Benjamin Larin & Bernd Süssmuth, 2014. "Fiscal Autonomy and Fiscal Sustainability: Subnational Taxation and Public Indebtedness in Contemporary Spain," CESifo Working Paper Series 4726, CESifo.
    9. Martinez-Vazquez, Jorge & McNab, Robert M., 2003. "Fiscal Decentralization and Economic Growth," World Development, Elsevier, vol. 31(9), pages 1597-1616, September.
    10. Fortune, Peter, 1998. "Tax-Exempt Bonds Really Do Subsidize Municipal Capital!," National Tax Journal, National Tax Association;National Tax Journal, vol. 51(1), pages 43-54, March.
    11. Anisah Alfada, 2019. "Does Fiscal Decentralization Encourage Corruption in Local Governments? Evidence from Indonesia," JRFM, MDPI, vol. 12(3), pages 1-14, July.
    12. Oto-Peralías, Daniel & Romero-Ávila, Diego & Usabiaga, Carlos, 2013. "Does fiscal decentralization mitigate the adverse effects of corruption on public deficits?," European Journal of Political Economy, Elsevier, vol. 32(C), pages 205-231.
    13. Yongzheng Liu & Jorge Martinez-Vazquez & Alfred M. Wu, 2017. "Fiscal decentralization, equalization, and intra-provincial inequality in China," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(2), pages 248-281, April.
    14. Stotsky, Janet G. & Chakraborty, Lekha & Gandhi, Piyush, 2018. "Impact of Intergovernmental Fiscal Transfers on Gender Equality in India: An Empirical Analysis," Working Papers 18/240, National Institute of Public Finance and Policy.
    15. Berthold, Norbert & Fricke, Holger, 2007. "China's Booming Economy: Does the Federal Order Foster Growth?," Discussion Paper Series 95, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    16. Margit Schratzenstaller-Altzinger, 2006. "Teilstudie 12: Wachstumsimpulse durch die öffentliche Hand," WIFO Studies, WIFO, number 27451, March.
    17. Luiz de Mello, 2007. "Local Government Finances: The Link between Intergovernmental Transfers and Net Worth," OECD Economics Department Working Papers 581, OECD Publishing.
    18. Julia Darby & Muscatelli Anton & Graeme Roy, 2004. "Fiscal Federalism, Fiscal Consolidations and Cuts in Central Government Grants: Evidence from an Event Study," ERSA conference papers ersa04p366, European Regional Science Association.
    19. Bruno Sultanum & Zachary Bethune, 2016. "Decentralized Trade with Private Values," 2016 Meeting Papers 1630, Society for Economic Dynamics.
    20. C. Randall HENNING & Martin KESSLER, 2012. "Fiscal Federalism: US History for Architects of Europe’s Fiscal Union," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 1-31.

    More about this item

    Keywords

    Municipal bonds; capital markets; regional government; Indonesia.;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services

    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:ers:ijebaa:v:viii:y:2020:i:3:p:326-334. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Marios Agiomavritis (email available below). General contact details of provider: https://ijeba.com/ .

    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.