Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector?
This paper seeks to assess the extent to which a country's overall level of development and that of its financial sector, in particular, are factors that attract private capital into infrastructure projects. The authors investigate these effec...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100722084641 http://hdl.handle.net/10986/3857 |
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okr-10986-3857 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ADVERSE EFFECTS BANK FINANCING BANK LOAN BANK POLICY BANKING SECTOR BANKING SECTOR DEVELOPMENT BOND BOND BANK BOND FINANCING BOND ISSUANCE BOND ISSUANCES BONDS BORROWER BORROWING BORROWING CAPACITY BROAD ACCESS CAPITAL MARKET CAPITAL MARKET INVESTORS CAPITAL MARKETS DEVELOPMENT CENTRAL BANK CENTRAL BANKS CLASS OF BOND CLIENT COUNTRIES COMMERCIAL BANKS CONSUMER PROTECTION CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORRUPTION COUNTRY RISK CREDIT RATINGS CREDITORS CREDITWORTHINESS CURRENCY DEVALUATION DEBT DEBT-EQUITY DEMOGRAPHIC DEPOSIT DEVALUATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DOMESTIC BANKS DOMESTIC CAPITAL DOMESTIC CAPITAL MARKET DOMESTIC CAPITAL MARKETS DOMESTIC ECONOMY ECONOMETRIC ANALYSIS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC RISK ECONOMIC SYSTEM EMPLOYMENT EQUITY FINANCING EXCHANGE RATE EXCHANGE RATE FLUCTUATIONS EXISTING INFRASTRUCTURES EXPOSURE EXTERNALITIES FINANCES FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCIAL MARKETS DEVELOPMENT FINANCIAL REFORMS FINANCIAL RISK FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SECTORS FINANCIAL SYSTEM FINANCING INSTRUMENTS FINANCING OF INFRASTRUCTURE PROJECTS FISCAL REFORMS FOREIGN CURRENCY FOREIGN CURRENCY DEBT FOREIGN EXCHANGE FOREIGN EXCHANGE RISK FOREIGN MARKETS GDP GDP PER CAPITA GROWTH RATE GROWTH RATES HOUSEHOLDS INCOME INCOME GROUP INCOME LEVELS INDEPENDENT REGULATOR INFORMATION ON MARKET INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE FINANCE INFRASTRUCTURE FINANCING INFRASTRUCTURE INDUSTRIES INFRASTRUCTURE INVESTMENTS INFRASTRUCTURE PROJECT INFRASTRUCTURE PROJECTS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL REFORMS INSTRUMENT INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL INVESTMENT INTERNATIONAL TRADE INVESTMENT DECISIONS INVESTMENT IN INFRASTRUCTURE INVESTMENT IN INFRASTRUCTURE PROJECTS INVESTMENT REGIME INVESTOR CONFIDENCE LEGAL ENVIRONMENT LEGAL SYSTEM LEVEL OF RISK LIBERALIZATION LIFE INSURANCE LIQUIDITY LOAN CLUBS LOANS FROM BANKS LOCAL BANK LOCAL CAPITAL MARKETS LOCAL CURRENCY LOCAL FINANCIAL MARKETS LOCAL GOVERNMENTS LONG-TERM FINANCE LONG-TERM LOANS LOW-INCOME COUNTRIES MACROECONOMIC STABILITY MARKET FAILURES MARKET TURNOVER MBI MIDDLE INCOME COUNTRIES MIDDLE INCOME COUNTRY MIDDLE-INCOME COUNTRIES MONOPOLIES OUTPUT PENSION PENSION FUNDS PER CAPITA INCOME POLITICAL SYSTEM POSITIVE EFFECTS PRIVATE CAPITAL PRIVATE CAPITAL FLOWS PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE INVESTMENT IN INFRASTRUCTURE PRIVATE INVESTMENT IN POWER PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR INVESTMENT PRIVATE SECTOR INVESTMENT IN INFRASTRUCTURE PRIVATE SECTOR INVOLVEMENT PRIVATE SECTOR PARTICIPATION PRIVATIZATION PROJECT SPONSORS PUBLIC GOOD PUBLIC INVESTMENT PUBLIC SERVICES PUBLIC SPENDING PUBLIC UTILITIES PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS QUALITY OF SERVICE REGULATOR REGULATORY AGENCIES REGULATORY AGENCY REGULATORY AUTHORITIES REGULATORY AUTHORITY REGULATORY ENVIRONMENT REGULATORY FRAMEWORK REGULATORY GOVERNANCE RISK FACTOR RISK FACTORS RISK MITIGATION RULE OF LAW SAVINGS INSTITUTIONS SECONDARY MARKETS SERVICE DELIVERY SERVICE PROVISION SHAREHOLDERS SOVEREIGN BONDS STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS SUSTAINABLE DEVELOPMENT TRADE BARRIERS TRANSACTION TRANSACTION COSTS TRANSPARENCY TURNOVER TURNOVER RATIO URBANIZATION VOLATILITY |
| spellingShingle |
ACCOUNTING ADVERSE EFFECTS BANK FINANCING BANK LOAN BANK POLICY BANKING SECTOR BANKING SECTOR DEVELOPMENT BOND BOND BANK BOND FINANCING BOND ISSUANCE BOND ISSUANCES BONDS BORROWER BORROWING BORROWING CAPACITY BROAD ACCESS CAPITAL MARKET CAPITAL MARKET INVESTORS CAPITAL MARKETS DEVELOPMENT CENTRAL BANK CENTRAL BANKS CLASS OF BOND CLIENT COUNTRIES COMMERCIAL BANKS CONSUMER PROTECTION CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORRUPTION COUNTRY RISK CREDIT RATINGS CREDITORS CREDITWORTHINESS CURRENCY DEVALUATION DEBT DEBT-EQUITY DEMOGRAPHIC DEPOSIT DEVALUATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DOMESTIC BANKS DOMESTIC CAPITAL DOMESTIC CAPITAL MARKET DOMESTIC CAPITAL MARKETS DOMESTIC ECONOMY ECONOMETRIC ANALYSIS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC RISK ECONOMIC SYSTEM EMPLOYMENT EQUITY FINANCING EXCHANGE RATE EXCHANGE RATE FLUCTUATIONS EXISTING INFRASTRUCTURES EXPOSURE EXTERNALITIES FINANCES FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCIAL MARKETS DEVELOPMENT FINANCIAL REFORMS FINANCIAL RISK FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SECTORS FINANCIAL SYSTEM FINANCING INSTRUMENTS FINANCING OF INFRASTRUCTURE PROJECTS FISCAL REFORMS FOREIGN CURRENCY FOREIGN CURRENCY DEBT FOREIGN EXCHANGE FOREIGN EXCHANGE RISK FOREIGN MARKETS GDP GDP PER CAPITA GROWTH RATE GROWTH RATES HOUSEHOLDS INCOME INCOME GROUP INCOME LEVELS INDEPENDENT REGULATOR INFORMATION ON MARKET INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE FINANCE INFRASTRUCTURE FINANCING INFRASTRUCTURE INDUSTRIES INFRASTRUCTURE INVESTMENTS INFRASTRUCTURE PROJECT INFRASTRUCTURE PROJECTS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL REFORMS INSTRUMENT INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL INVESTMENT INTERNATIONAL TRADE INVESTMENT DECISIONS INVESTMENT IN INFRASTRUCTURE INVESTMENT IN INFRASTRUCTURE PROJECTS INVESTMENT REGIME INVESTOR CONFIDENCE LEGAL ENVIRONMENT LEGAL SYSTEM LEVEL OF RISK LIBERALIZATION LIFE INSURANCE LIQUIDITY LOAN CLUBS LOANS FROM BANKS LOCAL BANK LOCAL CAPITAL MARKETS LOCAL CURRENCY LOCAL FINANCIAL MARKETS LOCAL GOVERNMENTS LONG-TERM FINANCE LONG-TERM LOANS LOW-INCOME COUNTRIES MACROECONOMIC STABILITY MARKET FAILURES MARKET TURNOVER MBI MIDDLE INCOME COUNTRIES MIDDLE INCOME COUNTRY MIDDLE-INCOME COUNTRIES MONOPOLIES OUTPUT PENSION PENSION FUNDS PER CAPITA INCOME POLITICAL SYSTEM POSITIVE EFFECTS PRIVATE CAPITAL PRIVATE CAPITAL FLOWS PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE INVESTMENT IN INFRASTRUCTURE PRIVATE INVESTMENT IN POWER PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR INVESTMENT PRIVATE SECTOR INVESTMENT IN INFRASTRUCTURE PRIVATE SECTOR INVOLVEMENT PRIVATE SECTOR PARTICIPATION PRIVATIZATION PROJECT SPONSORS PUBLIC GOOD PUBLIC INVESTMENT PUBLIC SERVICES PUBLIC SPENDING PUBLIC UTILITIES PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS QUALITY OF SERVICE REGULATOR REGULATORY AGENCIES REGULATORY AGENCY REGULATORY AUTHORITIES REGULATORY AUTHORITY REGULATORY ENVIRONMENT REGULATORY FRAMEWORK REGULATORY GOVERNANCE RISK FACTOR RISK FACTORS RISK MITIGATION RULE OF LAW SAVINGS INSTITUTIONS SECONDARY MARKETS SERVICE DELIVERY SERVICE PROVISION SHAREHOLDERS SOVEREIGN BONDS STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS SUSTAINABLE DEVELOPMENT TRADE BARRIERS TRANSACTION TRANSACTION COSTS TRANSPARENCY TURNOVER TURNOVER RATIO URBANIZATION VOLATILITY Ba, Lika Gasmi, Farid Noumba Um, Paul Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector? |
| geographic_facet |
The World Region |
| relation |
Policy Research working paper ; no. WPS 5373 |
| description |
This paper seeks to assess the extent to
which a country's overall level of development and that
of its financial sector, in particular, are factors that
attract private capital into infrastructure projects. The
authors investigate these effects in a 1990-2007 dataset on
the power sector in 37 developing countries. The results
suggest that economic growth is a key determinant of private
investors' investment in infrastructure projects, and
that investors tend to take countries governance quality
into account in their decisions to invest. The empirical
results highlight that the development of the financial
sector also plays a significant role in private
investors' decisions to enter infrastructure sectors.
In particular, the degree of country risk and exchange rate
volatility is found to be negatively related to the volume
of private sector investment in power projects. Furthermore,
when the banking sector and the capital market are
separately treated in the analysis, the existence of a well
functioning capital market is the main attracting factor. In
addition, the existence of an independent energy regulatory
authority significantly improves the level of private
investors' implication in energy projects. When
accounting for the interactions between the overall economic
development and the financial sector development variables,
the effects of these variables are still significant and the
results also confirm the importance of an independent energy
sector regulator. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Ba, Lika Gasmi, Farid Noumba Um, Paul |
| author_facet |
Ba, Lika Gasmi, Farid Noumba Um, Paul |
| author_sort |
Ba, Lika |
| title |
Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector? |
| title_short |
Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector? |
| title_full |
Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector? |
| title_fullStr |
Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector? |
| title_full_unstemmed |
Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector? |
| title_sort |
is the level of financial sector development a key determinant of private investment in the power sector? |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100722084641 http://hdl.handle.net/10986/3857 |
| _version_ |
1764388697389662208 |
| spelling |
okr-10986-38572021-04-23T14:02:13Z Is the Level of Financial Sector Development a Key Determinant of Private Investment in the Power Sector? Ba, Lika Gasmi, Farid Noumba Um, Paul ACCOUNTING ADVERSE EFFECTS BANK FINANCING BANK LOAN BANK POLICY BANKING SECTOR BANKING SECTOR DEVELOPMENT BOND BOND BANK BOND FINANCING BOND ISSUANCE BOND ISSUANCES BONDS BORROWER BORROWING BORROWING CAPACITY BROAD ACCESS CAPITAL MARKET CAPITAL MARKET INVESTORS CAPITAL MARKETS DEVELOPMENT CENTRAL BANK CENTRAL BANKS CLASS OF BOND CLIENT COUNTRIES COMMERCIAL BANKS CONSUMER PROTECTION CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORRUPTION COUNTRY RISK CREDIT RATINGS CREDITORS CREDITWORTHINESS CURRENCY DEVALUATION DEBT DEBT-EQUITY DEMOGRAPHIC DEPOSIT DEVALUATION DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DOMESTIC BANKS DOMESTIC CAPITAL DOMESTIC CAPITAL MARKET DOMESTIC CAPITAL MARKETS DOMESTIC ECONOMY ECONOMETRIC ANALYSIS ECONOMETRIC MODELS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC RESEARCH ECONOMIC RISK ECONOMIC SYSTEM EMPLOYMENT EQUITY FINANCING EXCHANGE RATE EXCHANGE RATE FLUCTUATIONS EXISTING INFRASTRUCTURES EXPOSURE EXTERNALITIES FINANCES FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKETS FINANCIAL MARKETS DEVELOPMENT FINANCIAL REFORMS FINANCIAL RISK FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SECTORS FINANCIAL SYSTEM FINANCING INSTRUMENTS FINANCING OF INFRASTRUCTURE PROJECTS FISCAL REFORMS FOREIGN CURRENCY FOREIGN CURRENCY DEBT FOREIGN EXCHANGE FOREIGN EXCHANGE RISK FOREIGN MARKETS GDP GDP PER CAPITA GROWTH RATE GROWTH RATES HOUSEHOLDS INCOME INCOME GROUP INCOME LEVELS INDEPENDENT REGULATOR INFORMATION ON MARKET INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE FINANCE INFRASTRUCTURE FINANCING INFRASTRUCTURE INDUSTRIES INFRASTRUCTURE INVESTMENTS INFRASTRUCTURE PROJECT INFRASTRUCTURE PROJECTS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL REFORMS INSTRUMENT INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL INVESTMENT INTERNATIONAL TRADE INVESTMENT DECISIONS INVESTMENT IN INFRASTRUCTURE INVESTMENT IN INFRASTRUCTURE PROJECTS INVESTMENT REGIME INVESTOR CONFIDENCE LEGAL ENVIRONMENT LEGAL SYSTEM LEVEL OF RISK LIBERALIZATION LIFE INSURANCE LIQUIDITY LOAN CLUBS LOANS FROM BANKS LOCAL BANK LOCAL CAPITAL MARKETS LOCAL CURRENCY LOCAL FINANCIAL MARKETS LOCAL GOVERNMENTS LONG-TERM FINANCE LONG-TERM LOANS LOW-INCOME COUNTRIES MACROECONOMIC STABILITY MARKET FAILURES MARKET TURNOVER MBI MIDDLE INCOME COUNTRIES MIDDLE INCOME COUNTRY MIDDLE-INCOME COUNTRIES MONOPOLIES OUTPUT PENSION PENSION FUNDS PER CAPITA INCOME POLITICAL SYSTEM POSITIVE EFFECTS PRIVATE CAPITAL PRIVATE CAPITAL FLOWS PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE INVESTMENT IN INFRASTRUCTURE PRIVATE INVESTMENT IN POWER PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR INVESTMENT PRIVATE SECTOR INVESTMENT IN INFRASTRUCTURE PRIVATE SECTOR INVOLVEMENT PRIVATE SECTOR PARTICIPATION PRIVATIZATION PROJECT SPONSORS PUBLIC GOOD PUBLIC INVESTMENT PUBLIC SERVICES PUBLIC SPENDING PUBLIC UTILITIES PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS QUALITY OF SERVICE REGULATOR REGULATORY AGENCIES REGULATORY AGENCY REGULATORY AUTHORITIES REGULATORY AUTHORITY REGULATORY ENVIRONMENT REGULATORY FRAMEWORK REGULATORY GOVERNANCE RISK FACTOR RISK FACTORS RISK MITIGATION RULE OF LAW SAVINGS INSTITUTIONS SECONDARY MARKETS SERVICE DELIVERY SERVICE PROVISION SHAREHOLDERS SOVEREIGN BONDS STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS SUSTAINABLE DEVELOPMENT TRADE BARRIERS TRANSACTION TRANSACTION COSTS TRANSPARENCY TURNOVER TURNOVER RATIO URBANIZATION VOLATILITY This paper seeks to assess the extent to which a country's overall level of development and that of its financial sector, in particular, are factors that attract private capital into infrastructure projects. The authors investigate these effects in a 1990-2007 dataset on the power sector in 37 developing countries. The results suggest that economic growth is a key determinant of private investors' investment in infrastructure projects, and that investors tend to take countries governance quality into account in their decisions to invest. The empirical results highlight that the development of the financial sector also plays a significant role in private investors' decisions to enter infrastructure sectors. In particular, the degree of country risk and exchange rate volatility is found to be negatively related to the volume of private sector investment in power projects. Furthermore, when the banking sector and the capital market are separately treated in the analysis, the existence of a well functioning capital market is the main attracting factor. In addition, the existence of an independent energy regulatory authority significantly improves the level of private investors' implication in energy projects. When accounting for the interactions between the overall economic development and the financial sector development variables, the effects of these variables are still significant and the results also confirm the importance of an independent energy sector regulator. 2012-03-19T18:41:03Z 2012-03-19T18:41:03Z 2010-07-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100722084641 http://hdl.handle.net/10986/3857 English Policy Research working paper ; no. WPS 5373 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region |