Project financing versus corporate financing under asymmetric information

Miglo, A

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.

Citation

Miglo, A. (2010). Project financing versus corporate financing under asymmetric information. Journal of Business and Economics Research, 8(8), 27-42. https://doi.org/10.19030/jber.v8i8.749

• Journal Article Type: Article
• Publication Date: Aug 1, 2010
• Deposit Date: May 26, 2021
• Publicly Available Date: May 26, 2021
• Journal: Journal of Business & Economics Research (JBER)
• Print ISSN: 1542-4448
• Electronic ISSN: 2157-8893
• Publisher: Clute Institute
• Volume: 8
• Issue: 8
• Pages: 27-42
• DOI: https://doi.org/10.19030/jber.v8i8.749
• Publisher URL: https://doi.org/10.19030/jber.v8i8.749
• Related Public URLs: http://journals.cluteonline.com/index.php/JBER