Optimal Capital Structure of Public-Private Joint Ventures
January 1, 2008
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Summary
This paper presents a model to assess the efficiency of the capital structure in public-private partnerships (PPP). A main argument supporting the PPP approach for investment projects is the transfer of know-how from the private partner to the public entity. The paper shows how different knowledge transfer schemes determine an optimal shareholding structure of the PPP. Under the assumption of lower capital cost of the public partner and lower development outlays when the investment is carried out by a private investor, an optimal capital structure is achieved with both the public and the private parties as shareholders.
Subject: Infrastructure, Public investment and public-private partnerships (PPP), Public investment spending, Public sector, Special purpose vehicle
Keywords: capital structure, WP
Pages:
13
Volume:
2008
DOI:
Issue:
001
Series:
Working Paper No. 2008/001
Stock No:
WPIEA2008001
ISBN:
9781451868630
ISSN:
1018-5941
