Corruption, Political Connections, and Municipal Finance

被引：150

作者：

Butler, Alexander W. ^{[1
]}

Fauver, Larry ^{[2
]}

Mortal, Sandra ^{[3
]}

机构：

[1] Univ Texas Dallas, Dept Finance, Sch Management, Richardson, TX 75083 USA

[2] Univ Tennessee, Knoxville, TN 37996 USA

[3] Univ Memphis, Memphis, TN 38152 USA

来源：

REVIEW OF FINANCIAL STUDIES | 2009年 / 22卷 / 07期

关键词：

INTERMEDIATION; COSTS;

D O I：

10.1093/rfs/hhp010

中图分类号：

F8 [财政、金融];

学科分类号：

0202 ;

摘要：

We show that state corruption and political connections have strong effects on municipal bond sales and underwriting. Higher state corruption is associated with greater credit risk and higher bond yields. Corrupt states can eliminate the corruption yield penalty by purchasing credit enhancements. Underwriting fees were significantly higher during an era when underwriters made political contributions to win underwriting business. This pay-to-play underwriting fee premium exists only for negotiated bid bonds where underwriting business can be allocated on the basis of political favoritism. Overall, our results show a strong impact of corruption and political connections on financial market outcomes. (JEL D73, G20, G22, G24, H74)

引用

页码：2873 / 2905

页数：33

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