Efficient Public-Private Capital Structures

Annals of Public and Cooperative Economics Vol. 85 No. 1

25 Pages Posted: 22 Dec 2010 Last revised: 18 Sep 2014

See all articles by Marian W. Moszoro

Marian W. Moszoro

George Mason University - Department of Economics; George Mason University - Interdisciplinary Center for Economic Science (ICES); Warsaw School of Economics (SGH)

Multiple version iconThere are 2 versions of this paper

Date Written: 2014

Abstract

This paper presents a rationale for hybrid public-private capital structures in public utilities. The public sector can borrow money cheaper, while private investors can spawn life-cycle cost savings. When investment vehicles enable the internalization of the financial advantage of the public sector and the managerial advantage of the private sector, a Pareto-efficient capital structure is achieved with both the public and private parties as shareholders. I show how different knowledge transfer schemes determine the optimal shareholding structure for the utility company.

Keywords: Public-Private Partnerships, Ownership Structures, Public Investment Policy, Knowledge Transfer, Water Utilities

JEL Classification: G32, H43, H54, L32, L95

Suggested Citation

Moszoro, Marian W., Efficient Public-Private Capital Structures (2014). Annals of Public and Cooperative Economics Vol. 85 No. 1. Available at SSRN: https://ssrn.com/abstract=1729648 or http://dx.doi.org/10.2139/ssrn.1729648

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

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

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