"The Determinants of the Municipal Bonds Market in Romania"

Abstract

"Municipal bonds are widely issued by local municipalities as a feasible financial alternative to fund infrastructure projects. On the other side, from the investors’ perspective, bonds issued by municipalities have historically been a popular investment option due to often favorable tax treatment for investors as well as the issuer’s credibility and generally high credit quality of the market. The paper explores the factors that influence the size and interest rates of Romanian municipal bonds for a 20 years period starting from 2001, when the first issuance took place, to the present. The data collected were analyzed through multiple linear regressions using ordinary least square estimator. The results revealed that municipalities with large populations, higher levels of income and expenses, and longer maturity tended to issue more municipal bonds. On the other hand, the unemployment and inflation rates increased the interest rates. The regions, fund destinations, and political variables also influenced the levels of bonds issued as well as the interest rates. These findings illustrated the importance of the context at local and national level, expressed by different social, economic and political variables that local governments should consider when issuing municipal bonds. The study contributes to the development of knowledge in the area of issuer’s characteristics and, moreover, the political, economic, and financial setting influences on the municipal bond market in an emergent country from Eastern Europe, Romania."

Dynamic connectedness of green bond with financial markets of European countries under OECD economies

“…The primary objective of Paris Agreement was to redirect funds to projects, that foster climate resilience, while reducing carbon emissions. With the transition to reduced reliance on carbon as a fuel, economies now require huge investments to fund environment friendly projects (Tiron-Tudor et al 2021 ). To achieve the Paris Agreement climate targets and the UN Sustainable Development Goals (SDGs), enormous commitment of financial resources in climate friendly projects and investment opportunities is imperative (Reboredo and Ugolini, 2020 ).…”

The Determinants of Green Bond Issuance in the European Union

“…The transition to a low-carbon economy requires significant investments, so the attention is focused on finding financial sources to fund environmentally friendly projects. Bonds represent a feasible financial alternative to fund infrastructure projects (Tiron-Tudor et al 2021). Thus, green bonds are new financial tools that provide direct financing for the economy.…”