Abstract
AbstractThis paper applies the contract theory to study the role of National Development Bank (NDB) in financing infrastructure investment. We first show that to mitigate overrun issues resulting from the agency problem during the infrastructure construction, the government uses mixed financing strategy combining fiscal funding with NDB loans. We then endogenize the NDB investment strategy to study the determinants of NDB profit and use cross-country panel data to empirically test our model predictions.
Funder
National Natural Science Foundation of China
National Social Science Fund of China
Ford Foundation
Publisher
Springer Science and Business Media LLC
Subject
Economics and Econometrics
Cited by
1 articles.
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