Date of Award
Doctor of Philosophy (PhD)
Donald R. Deis
The municipal bond market is widely perceived to be amenable to influence peddling between parties to bond transactions. One of the primary concerns of both regulators and investors is the relationship between political contributions by bond market participants and the volume and profitability of bond market business engaged in by those participants. This study uses publicly available data from the state of Louisiana to provide evidence concerning the relationship between contributions made by bond market participants and bond business awarded or influenced by recipients of those contributions. Contributions by bond market players to officials likely to possess influence over bond transactions are determined to be larger than those made by other contributors, and candidates for three of the offices examined are identified as receiving significant contributions from bond market players. A relationship is similarly found between contribution levels and method of bond issue placement. The study also investigates financial information disclosure by bond issuing entities and the effects of that disclosure upon bond prices. Timely disclosure, as measured by compliance with state reporting regulation, is found to have no discernable effect upon bond interest costs. The information content of financial reports is modelled by Brown's Index, and is shown to be a significant component of the interest cost model.
Filling, Steven M., "Influence Peddling and the Municipal Market: An Investigation of Political Contributions and Accounting Disclosures." (1996). LSU Historical Dissertations and Theses. 6339.