• Medientyp: E-Artikel
  • Titel: Risk Management with Leverage: Evidence from Project Finance
  • Beteiligte: Byoun, Soku; Kim, Jaemin; Yoo, Sean Sehyun
  • Erschienen: Cambridge University Press (CUP), 2013
  • Erschienen in: Journal of Financial and Quantitative Analysis, 48 (2013) 2, Seite 549-577
  • Sprache: Englisch
  • DOI: 10.1017/s0022109013000082
  • ISSN: 0022-1090; 1756-6916
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  • Beschreibung: AbstractWe examine capital structures of 2,572 project-financed investments in 124 countries for the period 1997–2006. In contrast to the general prediction of the trade-off theory, we find that project companies use more leverage when project risk is high, but they use less leverage in the presence of risk-reducing features including offtake agreements. Project companies use less leverage and instead rely more on offtake agreements when the control benefits of cash flow from the project are high, suggesting that leverage and contract structures in the project company are important hedging mechanisms.