Is Management Performance a Factor in Municipal Bond Credit Ratings? The Case of Texas School Districts

Dwight V. Denison, Wenli Yan, Zhirong J Zhao

Research output: Contribution to journalArticle

19 Citations (Scopus)

Abstract

Municipal bond ratings are an important determinant of interest costs that a bond issuer must pay. The three major bond rating firms profess that economic and management factors are considered in assigning a bond rating. The management component is of particular interest to public administrators because they can exert more direct control over management factors. Management factors have not been studied empirically in the literature because management performance is generally difficult to quantify. However, the public education sector has seen advances in performance measures and at the same time has increasingly relied on municipal bonds to finance construction. The ordered probit estimation provides support that management performance, as measured in the districts performance on standardized test scores and success in student college admission rates, does influence Texas school district bond credit ratings.

Original languageEnglish (US)
Pages (from-to)86-98
Number of pages13
JournalPublic Budgeting and Finance
Volume27
Issue number4
DOIs
StatePublished - Jan 1 2007

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rating
district
management
school
performance
public education
Municipal bonds
Factors
Management performance
School districts
Credit rating
finance
determinants
firm
Bond ratings
costs
economics
student

Cite this

Is Management Performance a Factor in Municipal Bond Credit Ratings? The Case of Texas School Districts. / Denison, Dwight V.; Yan, Wenli; Zhao, Zhirong J.

In: Public Budgeting and Finance, Vol. 27, No. 4, 01.01.2007, p. 86-98.

Research output: Contribution to journalArticle

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