Project financing versus corporate financing under asymmetric information

Anton Miglo

Research output: Contribution to journalArticlepeer-review


In recent years, financing through the creation of an independent project company or financing by non-recourse debt has become an important part of corporate decisions. Shah and Thakor (JET,1987) argue that project financing can be optimal when asymmetric information exists between firms’ insiders and market participants. In contrast to that paper, we provide an asymmetric information argument for project financing without relying on corporate taxes, costly information production or an assumption that firms have the same means of return. In addition, the model generates new predictions regarding asset securitization.
Original languageEnglish
Pages (from-to)23-43
Number of pages11
JournalJournal of Business & Economics Research
Issue number8
Publication statusPublished - 1 Aug 2010


  • asymmetric information, non-recourse debt, project financing, asset securitization

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