Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions

The paper examines the capital structure of regulated infrastructure firms. The authors develop a model showing that leverage, the ratio of liabilities to assets, is lower under high-powered regulation and that firms operating under high-powered re...

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Main Authors:	Moore, Alexander, Straub, Stéphane, Dethier, Jean-Jacques
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	AMOUNT OF DEBT BAILOUTS BANK POLICY BANKRUPT BANKRUPTCY BANKRUPTCY INCREASES BARRIER BENCHMARKING BOND BOND MARKET BOND MARKET CAPITALIZATION BOOK VALUES CAPITAL ASSET CAPITAL ASSET PRICING CAPITAL MARKETS CAPITAL RATIO CAPITAL STRUCTURE CAPITAL STRUCTURES CHAPTER 7 CLAIM CLAIMANTS CONCESSION CONCESSION CONTRACT CONCESSION CONTRACTS CONSUMER SURPLUS CONSUMERS CONTRACT RENEGOTIATIONS CORPORATE FINANCE CORPORATE TAX CORPORATE TAX RATE CORPORATE TAX RATES CORRUPTION COST OF DEBT COST OF EQUITY COUNTRY DUMMIES COUNTRY RISK CURRENT ASSETS DEBT DEBT HOLDERS DEPENDENT DEPOSIT DEPOSIT INTEREST DEPOSIT INTEREST RATE DEPOSIT RATE DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIRECT PAYMENT DOMESTIC DEBT SECURITIES DUMMY VARIABLE EARNINGS BEFORE INTEREST ECONOMETRICS EIB EMERGING MARKET EMERGING MARKETS EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXISTING DEBT EXPOSURE EXTERNAL INVESTORS FINANCIAL CORPORATION FINANCIAL DATA FINANCIAL DEVELOPMENT FINANCIAL DIFFICULTY FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL PERFORMANCE FINANCIAL STATEMENTS FINANCIERS GDP GDP DEFLATOR GOVERNMENT ACTION GOVERNMENT GUARANTEE GOVERNMENT GUARANTEES HIGHLY LEVERAGED FIRMS INCENTIVE STRUCTURE INCOME INCOME DISTRIBUTION INFLATION INFRASTRUCTURE CONCESSIONS INFRASTRUCTURE FINANCE INFRASTRUCTURE PROJECTS INSTITUTIONAL INVESTOR INSURANCE INTEREST RATE SPREAD INTERNAL RATE OF RETURN INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS LEASE AGREEMENTS LEGISLATION LENDERS LENDING INTEREST RATE LEVEL OF DEBT LEVELS OF DEBT LEVERAGE LIQUIDITY LIQUIDITY PROBLEMS MARKET PORTFOLIO MARKET RISK MARKET VALUE MARKETS DATABASE MORAL HAZARD ORIGINAL CONTRACTS OUTPUT PAYOFF PAYOFFS POLITICAL RISK PORTFOLIO POTENTIAL INVESTORS PRICE CAP PRICE CAP REGULATION PRICE CAPS PRICE SETTING PRIVATE BOND PRIVATE CAPITAL PRIVATE DOMESTIC DEBT PRIVATE INFRASTRUCTURE PRIVATE INVESTORS PROBABILITY OF BANKRUPTCY PROCUREMENT PRODUCTIVITY PROFITABILITY PUBLIC-PRIVATE PARTNERSHIPS RATE OF RETURN REAL ASSETS REAL GDP REGULATOR REGULATORS REGULATORY AGENCIES REGULATORY AGENCY REGULATORY ENVIRONMENT REGULATORY GOVERNANCE REGULATORY REGIME REGULATORY REGIMES REGULATORY STRUCTURE RENEGOTIATION RENEGOTIATION PROCESS RESIDUAL CLAIMANTS RETURN RETURN ON ASSETS RETURNS RISK AVERSE RISK NEUTRAL ROAD TOLLS SAVINGS SHAREHOLDERS STOCK MARKET STOCK MARKETS TAX TAX ADVANTAGE OF DEBT TAX RATES THREAT OF BANKRUPTCY TRANSPORT VARIABLE RATE VOLATILITY WORKING CAPITAL WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/2013/10/18366114/regulation-renegotiation-capital-structure-theory-evidence-latin-american-transport-concessions http://hdl.handle.net/10986/16862

id	okr-10986-16862
recordtype	oai_dc
spelling	okr-10986-168622021-04-23T14:03:32Z Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions Moore, Alexander Straub, Stéphane Dethier, Jean-Jacques AMOUNT OF DEBT BAILOUTS BANK POLICY BANKRUPT BANKRUPTCY BANKRUPTCY INCREASES BARRIER BENCHMARKING BOND BOND MARKET BOND MARKET CAPITALIZATION BOOK VALUES CAPITAL ASSET CAPITAL ASSET PRICING CAPITAL MARKETS CAPITAL RATIO CAPITAL STRUCTURE CAPITAL STRUCTURES CHAPTER 7 CLAIM CLAIMANTS CONCESSION CONCESSION CONTRACT CONCESSION CONTRACTS CONSUMER SURPLUS CONSUMERS CONTRACT RENEGOTIATIONS CORPORATE FINANCE CORPORATE TAX CORPORATE TAX RATE CORPORATE TAX RATES CORRUPTION COST OF DEBT COST OF EQUITY COUNTRY DUMMIES COUNTRY RISK CURRENT ASSETS DEBT DEBT HOLDERS DEPENDENT DEPOSIT DEPOSIT INTEREST DEPOSIT INTEREST RATE DEPOSIT RATE DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIRECT PAYMENT DOMESTIC DEBT SECURITIES DUMMY VARIABLE EARNINGS BEFORE INTEREST ECONOMETRICS EIB EMERGING MARKET EMERGING MARKETS EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXISTING DEBT EXPOSURE EXTERNAL INVESTORS FINANCIAL CORPORATION FINANCIAL DATA FINANCIAL DEVELOPMENT FINANCIAL DIFFICULTY FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL PERFORMANCE FINANCIAL STATEMENTS FINANCIERS GDP GDP DEFLATOR GOVERNMENT ACTION GOVERNMENT GUARANTEE GOVERNMENT GUARANTEES HIGHLY LEVERAGED FIRMS INCENTIVE STRUCTURE INCOME INCOME DISTRIBUTION INFLATION INFRASTRUCTURE CONCESSIONS INFRASTRUCTURE FINANCE INFRASTRUCTURE PROJECTS INSTITUTIONAL INVESTOR INSURANCE INTEREST RATE SPREAD INTERNAL RATE OF RETURN INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS LEASE AGREEMENTS LEGISLATION LENDERS LENDING INTEREST RATE LEVEL OF DEBT LEVELS OF DEBT LEVERAGE LIQUIDITY LIQUIDITY PROBLEMS MARKET PORTFOLIO MARKET RISK MARKET VALUE MARKETS DATABASE MORAL HAZARD ORIGINAL CONTRACTS OUTPUT PAYOFF PAYOFFS POLITICAL RISK PORTFOLIO POTENTIAL INVESTORS PRICE CAP PRICE CAP REGULATION PRICE CAPS PRICE SETTING PRIVATE BOND PRIVATE CAPITAL PRIVATE DOMESTIC DEBT PRIVATE INFRASTRUCTURE PRIVATE INVESTORS PROBABILITY OF BANKRUPTCY PROCUREMENT PRODUCTIVITY PROFITABILITY PUBLIC-PRIVATE PARTNERSHIPS RATE OF RETURN REAL ASSETS REAL GDP REGULATOR REGULATORS REGULATORY AGENCIES REGULATORY AGENCY REGULATORY ENVIRONMENT REGULATORY GOVERNANCE REGULATORY REGIME REGULATORY REGIMES REGULATORY STRUCTURE RENEGOTIATION RENEGOTIATION PROCESS RESIDUAL CLAIMANTS RETURN RETURN ON ASSETS RETURNS RISK AVERSE RISK NEUTRAL ROAD TOLLS SAVINGS SHAREHOLDERS STOCK MARKET STOCK MARKETS TAX TAX ADVANTAGE OF DEBT TAX RATES THREAT OF BANKRUPTCY TRANSPORT VARIABLE RATE VOLATILITY WORKING CAPITAL WORLD DEVELOPMENT INDICATORS The paper examines the capital structure of regulated infrastructure firms. The authors develop a model showing that leverage, the ratio of liabilities to assets, is lower under high-powered regulation and that firms operating under high-powered regulation make proportionally larger reductions in leverage when the cost of debt increases. They test the predictions of the model using an original panel dataset of 124 transport concessions in Brazil, Chile, Colombia and Peru over 1992-2011, finding broad support for our predictions. 2014-02-04T16:53:01Z 2014-02-04T16:53:01Z 2013-10 http://documents.worldbank.org/curated/en/2013/10/18366114/regulation-renegotiation-capital-structure-theory-evidence-latin-american-transport-concessions http://hdl.handle.net/10986/16862 English en_US Policy Research Working Paper;No. 6646 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Latin America Brazil Chile Colombia Peru
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	AMOUNT OF DEBT BAILOUTS BANK POLICY BANKRUPT BANKRUPTCY BANKRUPTCY INCREASES BARRIER BENCHMARKING BOND BOND MARKET BOND MARKET CAPITALIZATION BOOK VALUES CAPITAL ASSET CAPITAL ASSET PRICING CAPITAL MARKETS CAPITAL RATIO CAPITAL STRUCTURE CAPITAL STRUCTURES CHAPTER 7 CLAIM CLAIMANTS CONCESSION CONCESSION CONTRACT CONCESSION CONTRACTS CONSUMER SURPLUS CONSUMERS CONTRACT RENEGOTIATIONS CORPORATE FINANCE CORPORATE TAX CORPORATE TAX RATE CORPORATE TAX RATES CORRUPTION COST OF DEBT COST OF EQUITY COUNTRY DUMMIES COUNTRY RISK CURRENT ASSETS DEBT DEBT HOLDERS DEPENDENT DEPOSIT DEPOSIT INTEREST DEPOSIT INTEREST RATE DEPOSIT RATE DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIRECT PAYMENT DOMESTIC DEBT SECURITIES DUMMY VARIABLE EARNINGS BEFORE INTEREST ECONOMETRICS EIB EMERGING MARKET EMERGING MARKETS EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXISTING DEBT EXPOSURE EXTERNAL INVESTORS FINANCIAL CORPORATION FINANCIAL DATA FINANCIAL DEVELOPMENT FINANCIAL DIFFICULTY FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL PERFORMANCE FINANCIAL STATEMENTS FINANCIERS GDP GDP DEFLATOR GOVERNMENT ACTION GOVERNMENT GUARANTEE GOVERNMENT GUARANTEES HIGHLY LEVERAGED FIRMS INCENTIVE STRUCTURE INCOME INCOME DISTRIBUTION INFLATION INFRASTRUCTURE CONCESSIONS INFRASTRUCTURE FINANCE INFRASTRUCTURE PROJECTS INSTITUTIONAL INVESTOR INSURANCE INTEREST RATE SPREAD INTERNAL RATE OF RETURN INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS LEASE AGREEMENTS LEGISLATION LENDERS LENDING INTEREST RATE LEVEL OF DEBT LEVELS OF DEBT LEVERAGE LIQUIDITY LIQUIDITY PROBLEMS MARKET PORTFOLIO MARKET RISK MARKET VALUE MARKETS DATABASE MORAL HAZARD ORIGINAL CONTRACTS OUTPUT PAYOFF PAYOFFS POLITICAL RISK PORTFOLIO POTENTIAL INVESTORS PRICE CAP PRICE CAP REGULATION PRICE CAPS PRICE SETTING PRIVATE BOND PRIVATE CAPITAL PRIVATE DOMESTIC DEBT PRIVATE INFRASTRUCTURE PRIVATE INVESTORS PROBABILITY OF BANKRUPTCY PROCUREMENT PRODUCTIVITY PROFITABILITY PUBLIC-PRIVATE PARTNERSHIPS RATE OF RETURN REAL ASSETS REAL GDP REGULATOR REGULATORS REGULATORY AGENCIES REGULATORY AGENCY REGULATORY ENVIRONMENT REGULATORY GOVERNANCE REGULATORY REGIME REGULATORY REGIMES REGULATORY STRUCTURE RENEGOTIATION RENEGOTIATION PROCESS RESIDUAL CLAIMANTS RETURN RETURN ON ASSETS RETURNS RISK AVERSE RISK NEUTRAL ROAD TOLLS SAVINGS SHAREHOLDERS STOCK MARKET STOCK MARKETS TAX TAX ADVANTAGE OF DEBT TAX RATES THREAT OF BANKRUPTCY TRANSPORT VARIABLE RATE VOLATILITY WORKING CAPITAL WORLD DEVELOPMENT INDICATORS
spellingShingle	AMOUNT OF DEBT BAILOUTS BANK POLICY BANKRUPT BANKRUPTCY BANKRUPTCY INCREASES BARRIER BENCHMARKING BOND BOND MARKET BOND MARKET CAPITALIZATION BOOK VALUES CAPITAL ASSET CAPITAL ASSET PRICING CAPITAL MARKETS CAPITAL RATIO CAPITAL STRUCTURE CAPITAL STRUCTURES CHAPTER 7 CLAIM CLAIMANTS CONCESSION CONCESSION CONTRACT CONCESSION CONTRACTS CONSUMER SURPLUS CONSUMERS CONTRACT RENEGOTIATIONS CORPORATE FINANCE CORPORATE TAX CORPORATE TAX RATE CORPORATE TAX RATES CORRUPTION COST OF DEBT COST OF EQUITY COUNTRY DUMMIES COUNTRY RISK CURRENT ASSETS DEBT DEBT HOLDERS DEPENDENT DEPOSIT DEPOSIT INTEREST DEPOSIT INTEREST RATE DEPOSIT RATE DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DIRECT PAYMENT DOMESTIC DEBT SECURITIES DUMMY VARIABLE EARNINGS BEFORE INTEREST ECONOMETRICS EIB EMERGING MARKET EMERGING MARKETS EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXISTING DEBT EXPOSURE EXTERNAL INVESTORS FINANCIAL CORPORATION FINANCIAL DATA FINANCIAL DEVELOPMENT FINANCIAL DIFFICULTY FINANCIAL DISTRESS FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL PERFORMANCE FINANCIAL STATEMENTS FINANCIERS GDP GDP DEFLATOR GOVERNMENT ACTION GOVERNMENT GUARANTEE GOVERNMENT GUARANTEES HIGHLY LEVERAGED FIRMS INCENTIVE STRUCTURE INCOME INCOME DISTRIBUTION INFLATION INFRASTRUCTURE CONCESSIONS INFRASTRUCTURE FINANCE INFRASTRUCTURE PROJECTS INSTITUTIONAL INVESTOR INSURANCE INTEREST RATE SPREAD INTERNAL RATE OF RETURN INTERNATIONAL BANK INTERNATIONAL FINANCIAL STATISTICS LEASE AGREEMENTS LEGISLATION LENDERS LENDING INTEREST RATE LEVEL OF DEBT LEVELS OF DEBT LEVERAGE LIQUIDITY LIQUIDITY PROBLEMS MARKET PORTFOLIO MARKET RISK MARKET VALUE MARKETS DATABASE MORAL HAZARD ORIGINAL CONTRACTS OUTPUT PAYOFF PAYOFFS POLITICAL RISK PORTFOLIO POTENTIAL INVESTORS PRICE CAP PRICE CAP REGULATION PRICE CAPS PRICE SETTING PRIVATE BOND PRIVATE CAPITAL PRIVATE DOMESTIC DEBT PRIVATE INFRASTRUCTURE PRIVATE INVESTORS PROBABILITY OF BANKRUPTCY PROCUREMENT PRODUCTIVITY PROFITABILITY PUBLIC-PRIVATE PARTNERSHIPS RATE OF RETURN REAL ASSETS REAL GDP REGULATOR REGULATORS REGULATORY AGENCIES REGULATORY AGENCY REGULATORY ENVIRONMENT REGULATORY GOVERNANCE REGULATORY REGIME REGULATORY REGIMES REGULATORY STRUCTURE RENEGOTIATION RENEGOTIATION PROCESS RESIDUAL CLAIMANTS RETURN RETURN ON ASSETS RETURNS RISK AVERSE RISK NEUTRAL ROAD TOLLS SAVINGS SHAREHOLDERS STOCK MARKET STOCK MARKETS TAX TAX ADVANTAGE OF DEBT TAX RATES THREAT OF BANKRUPTCY TRANSPORT VARIABLE RATE VOLATILITY WORKING CAPITAL WORLD DEVELOPMENT INDICATORS Moore, Alexander Straub, Stéphane Dethier, Jean-Jacques Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions
geographic_facet	Latin America & Caribbean Latin America Brazil Chile Colombia Peru
relation	Policy Research Working Paper;No. 6646
description	The paper examines the capital structure of regulated infrastructure firms. The authors develop a model showing that leverage, the ratio of liabilities to assets, is lower under high-powered regulation and that firms operating under high-powered regulation make proportionally larger reductions in leverage when the cost of debt increases. They test the predictions of the model using an original panel dataset of 124 transport concessions in Brazil, Chile, Colombia and Peru over 1992-2011, finding broad support for our predictions.
format	Publications & Research :: Policy Research Working Paper
author	Moore, Alexander Straub, Stéphane Dethier, Jean-Jacques
author_facet	Moore, Alexander Straub, Stéphane Dethier, Jean-Jacques
author_sort	Moore, Alexander
title	Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions
title_short	Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions
title_full	Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions
title_fullStr	Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions
title_full_unstemmed	Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions
title_sort	regulation, renegotiation and capital structure : theory and evidence from latin american transport concessions
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2013/10/18366114/regulation-renegotiation-capital-structure-theory-evidence-latin-american-transport-concessions http://hdl.handle.net/10986/16862
_version_	1764434730032300032

Regulation, Renegotiation and Capital Structure : Theory and Evidence from Latin American Transport Concessions

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