Advanced Search
MyIDEAS: Login to save this article or follow this journal

Government guarantees and risk sharing in public-private partnerships

Contents:

Author Info

  • Takashima, Ryuta
  • Yagi, Kyoko
  • Takamori, Hiroshi
Registered author(s):

    Abstract

    We study the interaction between a private firm and a government when they time an investment decision while in a public-private partnership. We use a real options framework and consider the degree of sharing in the cost of the investment and the risk in the operation of the project. The degree of sharing influences the investment timing and the project value. When the guarantee of the government is large and/or the cost sharing rate for the private firm is low, then the private firm-maximizing policy exercises the investment option earlier than the project value-maximizing policy.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6W61-4XH5MR7-1/2/c4f6dddc3a2843495ca401d17bb6e5b7
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Review of Financial Economics.

    Volume (Year): 19 (2010)
    Issue (Month): 2 (April)
    Pages: 78-83

    as in new window
    Handle: RePEc:eee:revfin:v:19:y:2010:i:2:p:78-83

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/inca/620170

    Related research

    Keywords: Private firm Government guarantee Risk sharing Investment timing Real options;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Hayne E. Leland., 1994. "Corporate Debt Value, Bond Covenants, and Optimal Capital Structure," Research Program in Finance Working Papers RPF-233, University of California at Berkeley.
    2. Rose, Simon, 1998. "Valuation of Interacting Real Options in a Tollroad Infrastructure Project," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(3, Part 2), pages 711-723.
    3. Francis Ng & Hans Bjornsson, 2004. "Using real option and decision analysis to evaluate investments in the architecture, construction and engineering industry," Construction Management and Economics, Taylor & Francis Journals, vol. 22(5), pages 471-482.
    4. Mauer, David C. & Sarkar, Sudipto, 2005. "Real options, agency conflicts, and optimal capital structure," Journal of Banking & Finance, Elsevier, vol. 29(6), pages 1405-1428, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Megginson, William L., 2010. "Introduction to the special issue on project finance," Review of Financial Economics, Elsevier, vol. 19(2), pages 47-48, April.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:revfin:v:19:y:2010:i:2:p:78-83. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.