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Risk and capital structure in Asian project finance

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  • Paul Vaaler

    ()

  • Barclay James

    ()

  • Ruth Aguilera

    ()

Abstract

We develop and test a multi-level theoretical framework for understanding country-, industry-, syndicate-, firm- and project-specific factors shaping the capital structure and broader risk profile of a quintessentially Asian form of foreign direct investment ("FDI") called project finance. Empirical analyses of 238 projects announced for 13 Asian countries from 1995-2004 support hypotheses derived from our framework, and suggest that country-level institutional factors such as a Common Law legal system, syndicate-level factors such as the concentration of equity among syndicate sponsors, and project-level factors such as the US dollar cost of the project all substantially affect project capital structure and risk.

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File URL: http://hdl.handle.net/10.1007/s10490-007-9045-4
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Bibliographic Info

Article provided by Springer in its journal Asia Pacific Journal of Management.

Volume (Year): 25 (2008)
Issue (Month): 1 (January)
Pages: 25-50

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Handle: RePEc:kap:asiapa:v:25:y:2008:i:1:p:25-50

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Postal: P.O. Box 17, 3300 AA Dordrecht, the Netherlands
Web page: http://www.springerlink.com/link.asp?id=106589

Related research

Keywords: Project finance; Foreign direct investment; Risk; Capital structure; Governance; Institutions;

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References

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Cited by:
  1. Ramirez, Andres & Kwok, Chuck C.Y., 2010. "Settling the debate on multinational capital structure using the CEPR measure," Journal of Multinational Financial Management, Elsevier, vol. 20(4-5), pages 251-271, December.
  2. Pierru, Axel & Roussanaly, Simon & Sabathier, Jérôme, 2013. "Capital structure in LNG infrastructures and gas pipelines projects: Empirical evidences and methodological issues," Energy Policy, Elsevier, vol. 61(C), pages 285-291.

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