Optimal Capital Structure of Public-Private Partnerships

15 Pages Posted: 25 Jan 2008  

Marian Moszoro

George Mason University - Department of Economics; George Mason University - Interdisciplinary Center for Economic Science (ICES); Cornell University - CPIP

Pawel Gasiorowski

International Monetary Fund (IMF)

Date Written: December 2007

Abstract

This paper presents a model to assess the efficiency of the capital structure in public-private partnerships (PPP). A main argument supporting the PPP approach for investment projects is the transfer of know-how from the private partner to the public entity. The paper shows how different knowledge transfer schemes determine an optimal shareholding structure of the PPP. Under the assumption of lower capital cost of the public partner and lower development outlays when the investment is carried out by a private investor, an optimal capital structure is achieved with both the public and the private parties as shareholders.

Keywords: Private sector, Public sector, Investment

Suggested Citation

Moszoro, Marian and Gasiorowski, Pawel, Optimal Capital Structure of Public-Private Partnerships (December 2007). IMF Working Papers, Vol. , pp. 1-13, 2007. Available at SSRN: https://ssrn.com/abstract=1087179

Marian W. Moszoro (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://economics.gmu.edu/people/mmoszoro

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

400P Truland Building
George Mason University
Fairfax, VA 22030
United States

Cornell University - CPIP ( email )

Cornell Program in Infrastructure Policy
Ithaca, NY 14853
United States

HOME PAGE: http://www.human.cornell.edu/pam/cpip/people.cfm

Pawel Gasiorowski

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

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