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Project Finance as a Driver of Economic Growth in Low-Income Countries

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  • Kleimeier, Stefanie
  • Versteeg, Roald

    (METEOR)

Abstract

This study investigates the role of project finance as a driver of economic growth. We hypothesize that project finance is beneficial to the least developed economies as it compensates for any lack of domestic financial development. The contractual structure unique to project finance should lead to better investment management and governance. Investigating 90 countries from 1991 to 2005, we find support for our hypothesis. Project finance indeed fosters economic growth and this effect is strongest in low-income countries, where financial development and governance is weak.

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Bibliographic Info

Paper provided by Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR) in its series Research Memorandum with number 011.

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Date of creation: 2009
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Handle: RePEc:unm:umamet:2009011

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Postal: P.O. Box 616, 6200 MD Maastricht
Phone: +31 (0)43 38 83 830
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Web page: http://www.maastrichtuniversity.nl/
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Keywords: financial economics and financial management ;

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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.

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