Efficient Public‐Private Capital Structures

24 Pages Posted: 15 Feb 2014

See all articles by Marian W. Moszoro

Marian W. Moszoro

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

Date Written: March 1, 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

Suggested Citation

Moszoro, Marian W., Efficient Public‐Private Capital Structures (March 1, 2014). Annals of Public and Cooperative Economics, Vol. 85, Issue 1, pp. 103-126, 2014, Available at SSRN: https://ssrn.com/abstract=2396204 or http://dx.doi.org/10.1111/apce.12028

Marian W. Moszoro (Contact Author)

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

International Monetary Fund (IMF) ( email )

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

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

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