Project Finance as a Driver of Economic Growth in Low-Income Countries

45 Pages Posted: 11 Feb 2009

See all articles by Stefanie Kleimeier

Stefanie Kleimeier

Maastricht University - Department of Finance; Open Universiteit; Univ. of Stellenbosch Business School

Roald J. Versteeg

University of London - Economics, Mathematics and Statistics

Date Written: February 11, 2009

Abstract

This study investigates the role of project finance as a driver of economic growth. We hypothesize that project finance is beneficial to the least developed economies as it compensates for any lack of domestic financial development. The contractual structure unique to project finance should lead to better investment management and governance. Investigating 90 countries from 1991 to 2005, we find support for our hypothesis. Project finance indeed fosters economic growth and this effect is strongest in low-income countries, where financial development and governance is weak.

Keywords: project finance, economic growth, economic development, financial development, developing countries

JEL Classification: F43, G15, G21, O16

Suggested Citation

Kleimeier, Stefanie and Versteeg, Roald J., Project Finance as a Driver of Economic Growth in Low-Income Countries (February 11, 2009). Available at SSRN: https://ssrn.com/abstract=1340903 or http://dx.doi.org/10.2139/ssrn.1340903

Stefanie Kleimeier (Contact Author)

Maastricht University - Department of Finance ( email )

Maastricht, 6200 MD
Netherlands

Open Universiteit

Valkenburgerweg 177
Heerlen, 6419 AT
Netherlands

Univ. of Stellenbosch Business School

Carl Cronjé Drive
CAPE TOWN, Cape Town 7535
South Africa

Roald J. Versteeg

University of London - Economics, Mathematics and Statistics ( email )

Malet Street
London, WC1E 7HX
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,063
Abstract Views
3,840
rank
26,515
PlumX Metrics