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Regulation, renegotiation and capital structure: theory and evidence from Latin American transport concessions

Alexander Moore, Stephane Straub () and Jean-Jacques Dethier ()

No 6646, Policy Research Working Paper Series from The World Bank

Abstract: The paper examines the capital structure of regulated infrastructure firms. The authors develop a model showing that leverage, the ratio of liabilities to assets, is lower under high-powered regulation and that firms operating under high-powered regulation make proportionally larger reductions in leverage when the cost of debt increases. They test the predictions of the model using an original panel dataset of 124 transport concessions in Brazil, Chile, Colombia and Peru over 1992-2011, finding broad support for our predictions.

Keywords: Debt Markets; Emerging Markets; Bankruptcy and Resolution of Financial Distress; Banks&Banking Reform; Economic Theory&Research (search for similar items in EconPapers)
Date: 2013-10-01
New Economics Papers: this item is included in nep-lam, nep-reg and nep-tre
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Journal Article: Regulation, renegotiation and capital structure: theory and evidence from Latin American transport concessions (2014) Downloads
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