Too Close for Comfort: Does the Intensity of Municipal Advisor and Underwriter Relationship Impact Borrowing Costs?

This research explores the intensity of the relationship between municipal advisors and underwriters, as well as their quality and location, to assess the resulting impact on borrowing costs for negotiated debt. The findings from this research have practical policy implications related to the proper composition of a local government's debt financing team. In addition, the empirical findings shed light on central aspects in debt management networks as determined by the round‐trip transaction (RTT) theory, which point at new levers that subnational policy makers may use to gain efficiencies when accessing the municipal debt market.