Project financing versus corporate financing under asymmetric information

Anton Miglo

doi:10.19030/jber.v8i8.749

Project financing versus corporate financing under asymmetric information

Anton Miglo

School of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

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 language	English
Pages (from-to)	23-43
Number of pages	11
Journal	Journal of Business & Economics Research
Volume	8
Issue number	8
DOIs	https://doi.org/10.19030/jber.v8i8.749
Publication status	Published - 1 Aug 2010

Keywords

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

Access to Document

10.19030/jber.v8i8.749

Cite this

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