Project Financing Versus Corporate Financing under Asymmetric Information

Miglo, Anton (2010) Project Financing Versus Corporate Financing under Asymmetric Information. Journal of Business and Economics Research, 8 (8). pp. 27-42. ISSN 1542-4448

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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 firm's 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 mean of return. In addition, the model generates new predictions regarding asset securitization.

Item Type: Article
Subjects: L100 Economics
N100 Business studies
N200 Management studies
N300 Finance
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School > Dept. Accountancy and Finance
Depositing User: Anton Miglo
Date Deposited: 13 Aug 2018 07:53
Last Modified: 13 Aug 2018 07:53
URI: http://www.open-access.bcu.ac.uk/id/eprint/6212

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