Financial Reform and Public Good Provision: Municipal Bankruptcy Law and the Financing of Hospitals
研究美国各州采用市政破产法后，发现该法降低了市政借款成本、增加了债券发行（尤其是医院融资债券），并促进了医院投资及当地企业（特别是建筑业）的投资与绩效，揭示了金融改革通过减少工会租金、扩大投资来影响实体经济的溢出渠道。
Does financial reform improve public good provision? We examine state-level adoption of municipal bankruptcy law. After reform, municipalities’ borrowing costs decrease and bonds’ issuance increase, particularly for bonds financing hospitals; hospitals’ investments increase, particularly when using such bonds; local firms’ investment and performance increase, particularly in the construction sector. Ex ante, reform occurs earlier in states with weaker unions, stronger bondholders’ interests, and better courts. Similar factors explain congressional voting on municipal bankruptcy law. These results support the hypothesis that financial reform destroys labor union rents and expands investment, highlighting a novel spillover channel from public finance to the real economy. This paper was accepted by Victoria Ivashina, finance. Funding: This work was supported by the Baffi-CAREFIN Research Center at Bocconi. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4800 .