Project financing: Deal or no deal

An, Yunbi; Cheung, Keith C. K.

doi:10.1016/j.rfe.2009.02.002

Cited by 11 publications

(3 citation statements)

References 12 publications

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“…In the event of high volatility, the addition of high-risk investment can have an adverse effect on the existing block (White, 1976; Pollio, 1998; Ballestero, 2000; An and Cheung, 2010; Subramanian and Tung, 2016). Such high-risk and high default probable projects may have cascading effects and force the various stakeholders to re-examine their business associations.…”

Section: Discussion On Literature Reviewmentioning

confidence: 99%

Infrastructure project finance: a systematic literature review and directions for future research

Kumar

Srivastava

Tabash

2021

QRFM

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Purpose The objective of this systematic literature review (SLR) is to outline the existing research in the field of infrastructure project finance (IPF). This paper aims to summarise the academic and practitioner research to highlight the benefits of adopting IPF structures in uncertain environments. By highlighting all conceptual and applied implications of IPF, the study identifies future research directions to develop a holistic understanding of IPF. Design/methodology/approach The SLR is based on 125 articles published in peer-reviewed journals during 1975–2019. After providing a brief overview of IPF, research methodology and citation, publication and author analysis, the SLR presents the various domains around which existing research in IPF is focussed and provides future research propositions in each domain. Findings The study found that despite the increased usage of IPF, academic and practitioner research in the field is lagging. Also, with increased usage of IPF in emerging and under-developed economies, IPF structure presents a perfect setting to understand how investment and financing are interlinked and how to overcome the institutional voids, socio-economic risks and inter-partner differences by IPF structures. Originality/value This literature review paper is based on the research in IPF between 1975 and 2019. To the best of the authors’ understanding, the SLR is the first focussed study detailing a methodical and thorough compendium of existing studies in the IPF domain. By focussing on various domains of IPF research, this paper presents future research avenues in the field.

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Section: Discussion On Literature Reviewmentioning

confidence: 99%

Infrastructure project finance: a systematic literature review and directions for future research

Kumar

Srivastava

Tabash

2021

QRFM

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“…Project finance allows sponsors to mitigate the risks that originate from the fact that the project company's managers' efforts have little impact on market outcomes. A model proposed by An and Cheung (2010) argues that "companies tend to prefer corporate financing of investment when effort has a significant impact on the magnitude and likelihood of favorable outcomes" and vice versa. When projects become very large and require a commensurate large capital budget it is less likely that companies can manage the risk and associated expenditure from normal operations.…”

Section: Transfer the Risk To Risk Management Professionals (Insurers)mentioning

confidence: 99%

Preface

Doody¹,

Djonoputro²

2019

Infrastructure Investment in Indonesia

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This work is licensed under a Creative Commons Attribution 4.0 International license (CC BY 4.0). This license allows you to share, copy, distribute and transmit the text; to adapt the text and to make commercial use of the text providing attribution is made to the authors (but not in any way that suggests that they endorse you or your use of the work). Attribution should include the following information:

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“…Both these risk aversion values lie within the one to five range that many economists consider to be realistic (e.g., Ljungqvist and Sargent, 2004;Parrino et al, 2005;and An and Cheung, 2010). We also vary this figure between 0 and 100 to examine the sensitivity of dividend cyclicality to the manager's degree of risk aversion.…”

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confidence: 99%

Why are aggregate equity payouts pro-cyclical?

Huang

Freeman

Mazouz

2015

Journal of Macroeconomics

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We use two general equilibrium models to explain why changes in the external economic environment result in pro-cyclical aggregate dividend payout behavior.Both models that we consider endogenize low elasticity of investment. The first model incorporates capital adjustment costs, while the second one assumes that risk-averse managers maximize their own objective function rather than 1 shareholder wealth. We show that, while both models generate pro-cyclical aggregate dividends, a feature consistent with the observed business-cycle pattern of payouts from well-diversified portfolios, the second model provides a more likely explanation for this effect. Our findings emphasize the importance of incorporating agency conflicts when considering the relationship between the external economic environment and the financial behavior of businesses.

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Project financing: Deal or no deal

Cited by 11 publications

References 12 publications

Infrastructure project finance: a systematic literature review and directions for future research

Infrastructure project finance: a systematic literature review and directions for future research

Preface

Why are aggregate equity payouts pro-cyclical?

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