Project finance and governance: theories and implications in the infrastructure context
Infrastructure forms the backbone of the economy and provides essential services for the general public. Financing and managing the risks of large infrastructure projects are of crucial importance and can be very challenging.
In a project finance context, the entity delivering the infrastructure project, i.e. special purpose vehicle, is a legally-independent entity which commits to a single project with definite life. With less disturbance from ongoing complex investing and financing activities, special purpose vehicles have a simpler and more transparent structure, providing an attractive environment for researchers to investigate finance and risk management issues.
PPP (public-private partnership) is a common project finance structure. Among all PPP markets, the Chinese market has seen a dramatic expansion and growth in recent years. I, therefore, want to investigate finance and governance theories in the context of Chinese infrastructure projects, especially their empirical implications. I am mainly using quantitative research methods to dig deeper into the infrastructure projects in China (and potentially other countries around the world in the future). After revealing empirical regularities, this research can shed light on the optimal design of the financial structure as well as governance mechanism for entities which deliver complex infrastructure projects.