Efficient public-private partnerships
AbstractThis paper presents a model to assess the efficiency of the capital structure in public-private partnerships (PPP). A main argument supporting the PPP approach to investment projects is the transfer of managerial skills and know-how from the private partner to the investment vehicle. The paper shows how different managerial skills and 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, i.e. a mixed public-private capital structure makes it possible to internalize the financial advantage of the public sector and the managerial advantage of the private sector.
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Bibliographic InfoPaper provided by IESE Business School in its series IESE Research Papers with number D/884.
Length: 25 pages
Date of creation: 09 Oct 2010
Date of revision:
Public-Private Partnerships; Joint Ventures; Public investment policy; Knowledge transfer; Hybrid governance structures;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-11 (All new papers)
- NEP-PPM-2010-12-11 (Project, Program & Portfolio Management)
- NEP-PUB-2010-12-11 (Public Finance)
You can help add them by filling out this form.
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- Nuno Ferreira da Cruz & Pedro SimÃµes & Rui Cunha Marques, 2013. "The hurdles of local governments with PPP contracts in the waste sector," Environment and Planning C: Government and Policy, Pion Ltd, London, Pion Ltd, London, vol. 31(2), pages 292-307, April.
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