Regulation, renegotiation and capital structure : theory and evidence from Latin American transport concessions
The paper examines the capital structure of regulated infrastructure firms. The authors develop a model showing that leverage, the ratio of liabilities to assets, is lower under high-powered regulation and that firms operating under high-powered regulation make proportionally larger reductions in leverage when the cost of debt increases. They test the predictions of the model using an original panel dataset of 124 transport concessions in Brazil, Chile, Colombia and Peru over 1992-2011, finding broad support for our predictions.
|Date of creation:||01 Oct 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
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.:
- Bortolotti, Bernardo & Cambini, Carlo & Rondi, Laura & Spiegel, Yossi, 2008.
"Capital Structure and Regulation: Do Ownership and Regulatory Independence Matter?,"
CEPR Discussion Papers
7100, C.E.P.R. Discussion Papers.
- Bernardo Bortolotti & Carlo Cambini & Laura Rondi & Yossi Spiegel, 2011. "Capital Structure and Regulation: Do Ownership and Regulatory Independence Matter?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(2), pages 517-564, 06.
- Dasgupta, Sudipto & Nanda, Vikram, 1993. "Bargaining and brinkmanship : Capital structure choice by regulated firms," International Journal of Industrial Organization, Elsevier, vol. 11(4), pages 475-497.
- Engel, Eduardo & Fischer, Ronald & Galetovic, Alexander, 2010.
"The economics of infrastructure finance: Public-Private Partnerships versus public provision,"
2/2010, European Investment Bank, Economics Department.
- Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2010. "The economics of infrastructure finance: Public-private partnerships versus public provision," Documentos de Trabajo 276, Centro de Economía Aplicada, Universidad de Chile.
- Gaggero, Alberto A., 2007. "Regulatory risk in the utilities industry: An empirical study of the English-speaking countries," Utilities Policy, Elsevier, vol. 15(3), pages 191-205, September.
- Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2006.
"Renegotiation without Holdup: Anticipating Spending and Infrastructure Concessions,"
Documentos de Trabajo
221, Centro de Economía Aplicada, Universidad de Chile.
- Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2006. "Renegotiation without Holdup: Anticipating Spending and Infrastructure Concessions," Cowles Foundation Discussion Papers 1567, Cowles Foundation for Research in Economics, Yale University.
- Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2006. "Renegotiation Without Holdup: Anticipating Spending and Infrastructure Concessions," Working Papers 937, Economic Growth Center, Yale University.
- Eduardo Engel & Ronald Fischer & Alexander Galetovic, 2006. "Renegotiation Without Holdup: Anticipating Spending and Infrastructure Concessions," NBER Working Papers 12399, National Bureau of Economic Research, Inc.
- Marian Moszoro, 2013. "Overcoming Opportunism in Public-Private Project Finance," Journal of Applied Corporate Finance, Morgan Stanley, vol. 25(1), pages 89-96, 03.
- J. Luis Guasch & Jean-Jacques Laffont & Stéphane Straub, 2007.
"Concessions of infrastructure in Latin America: Government-led renegotiation,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 22(7), pages 1267-1294.
- Guasch, Jose Luis & Laffont, Jean-Jacques & Straub, Stéphane, 2005. "Concessions of Infrastructure in Latin America: Goverment-Led Renegotiation," IDEI Working Papers 372, Institut d'Économie Industrielle (IDEI), Toulouse.
- J. Luis Guasch & Jean-Jacques Laffont & Stephane Straub, 2005. "Concessions of Infrastructure in Latin America: Government-led Renegotiation," ESE Discussion Papers 132, Edinburgh School of Economics, University of Edinburgh.
- J. Luis Guasch, 2004. "Granting and Renegotiating Infrastructure Concessions : Doing it Right," World Bank Publications, The World Bank, number 15024.
- Alexander, Ian & Mayer, Colin & Weeds, Helen, 1996. "Regulatory structure and risk and infrastructure firms : an international comparison," Policy Research Working Paper Series 1698, The World Bank.
- Murray Z. Frank & Vidhan K. Goyal, 2009.
"Capital Structure Decisions: Which Factors Are Reliably Important?,"
Financial Management Association International, vol. 38(1), pages 1-37, 03.
- Frank, Murray Z. & Goyal, Vidhan K., 2009. "Capital Structure Decisions: Which Factors are Reliably Important?," MPRA Paper 22525, University Library of Munich, Germany.
- de Jong, Abe & Kabir, Rezaul & Nguyen, Thuy Thu, 2008.
"Capital structure around the world: The roles of firm- and country-specific determinants,"
Journal of Banking & Finance,
Elsevier, vol. 32(9), pages 1954-1969, September.
- de Jong, A. & Kabir, R. & Nguyen, T.T., 2007. "Capital Structure around the World: The Roles of Firm- and Country-Specific Determinants," ERIM Report Series Research in Management ERS-2007-058-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
- Rajan, Raghuram G & Zingales, Luigi, 1995.
" What Do We Know about Capital Structure? Some Evidence from International Data,"
Journal of Finance,
American Finance Association, vol. 50(5), pages 1421-60, December.
- Raghuram G. Rajan & Luigi Zingales, 1994. "What Do We Know About Capital Structure? Some Evidence from International Data," NBER Working Papers 4875, National Bureau of Economic Research, Inc.
- Benjamin C. Esty, 2004. "Why Study Large Projects? An Introduction to Research on Project Finance," European Financial Management, European Financial Management Association, vol. 10(2), pages 213-224.
- Myers, Stewart C, 1984. " The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-92, July.
- Klein, Michael, 2012.
"Infrastructure policy : basic design options,"
Policy Research Working Paper Series
6274, The World Bank.
- Yossef Spiegel & Daniel F. Spulber, 1994. "The Capital Structure of a Regulated Firm," RAND Journal of Economics, The RAND Corporation, vol. 25(3), pages 424-440, Autumn.
- Paulo Correa & Carlos Pereira & Bernardo Mueller & Marcus Melo, 2006. "Regulatory Governance in Infrastructure Industries: Assessment and Measurement of Brazilian Regulators," World Bank Publications, The World Bank, number 7059.
- Correa, Paulo & Melo, Marcus & Mueller, Bernardo & Pereira, Carlos, 2008. "Regulatory governance in Brazilian infrastructure industries," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 202-216, May.
- José M. Vassallo, 2006. "Traffic Risk Mitigation in Highway Concession Projects: The Experience of Chile," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 40(3), pages 359-381, September.
- Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Tomas Serebrisky, 2011. "Airport Economics in Latin America and the Caribbean : Benchmarking, Regulation, and Pricing," World Bank Publications, The World Bank, number 2389.
- Booth, L. & Asli Demirgu-Kunt, V.A. & Maksimovic, V., 1999.
"Capital Structure in Developing Countries,"
Rotman School of Management - Finance
00-001, Rotman School of Management, University of Toronto.
- Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
- Taggart, Robert A, Jr, 1981. "Rate-of-Return Regulation and Utility Capital Structure Decisions," Journal of Finance, American Finance Association, vol. 36(2), pages 383-93, May.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:6646. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.