Optimal Capital Structure of Public-Private Joint Ventures

Author/Editor:

Pawel Gasiorowski ; Marian Moszoro

Publication Date:

January 1, 2008

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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.

Series:

Working Paper No. 2008/001

Subject:

Infrastructure Public investment and public-private partnerships (PPP) Public investment spending Public sector Special purpose vehicle

English

Publication Date:

January 1, 2008

ISBN/ISSN:

9781451868630/1018-5941

Stock No:

WPIEA2008001

Pages:

13

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