Do State Bond Banks Have Cost Advantages for Municipal Bond Issuance?
Version of Record online: 19 AUG 2003
Public Budgeting & Finance
Volume 23, Issue 3, pages 92–108, September 2003
How to Cite
Robbins, M. D. and Kim, D. (2003), Do State Bond Banks Have Cost Advantages for Municipal Bond Issuance?. Public Budgeting & Finance, 23: 92–108. doi: 10.1111/1540-5850.2303005
- Issue online: 19 AUG 2003
- Version of Record online: 19 AUG 2003
State bond banks are created to extend management expertise, subsidies, and economies of scale to local government issuers, but bond banks incur issuance and program costs. This research examines whether state bond banks appear to achieve lower than average borrowing costs, once the costs of issuance are controlled for. We find that bond banks are associated with significantly lower borrowing costs for two of the three programs we examine, and determine that these savings are due largely to reductions in costs of issuance.