This paper investigates the impact of state authorizations of municipal bankruptcy on state government borrowing costs. The credit markets may perceive bankruptcy authorizations as credit enhancing because states signal no implicit guarantee of local debt. However, the markets may charge a risk premium if authorizations could cause strategic uses of bankruptcy, widespread filings, and contagion. Analyses using 1975–1997 state borrowing-cost estimates show that different authorization regimes have differing effects. Specifically, authorizations conditional on state intervention are associated with a reduction in state borrowing cost. Analyses of a 2010 Rhode Island legislation using state bond data provide similar findings.

中文翻译：

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并非所有的州破产授权都相等：对州借贷成本的影响

本文研究了国家批准城市破产对州政府借贷成本的影响。信用市场可能将破产授权视为信用增强，因为国家没有暗示对本地债务的任何隐含担保。但是，如果授权可能导致破产，大量申请和蔓延的战略用途，则市场可能会收取风险溢价。使用1975年至1997年国家借贷成本估算进行的分析表明，不同的授权制度具有不同的影响。具体而言，以国家干预为条件的授权与国家借贷成本的降低相关。使用州债券数据对2010年罗德岛州立法的分析提供了类似的发现。