Project financing versus corporate financing under asymmetric information

Anton Miglo

No 812, Working Papers from University of Guelph, Department of Economics and Finance

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

Keywords: asymmetric information; non-recourse debt; project-financing; asset securitization. (search for similar items in EconPapers)
JEL-codes: C72 D82 G29 G32 O22 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2008
New Economics Papers: this item is included in nep-bec, nep-cta and nep-ppm
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gue:guelph:2008-12

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