Munich Personal RePEc Archive

Efficient Public-Private Capital Structures

Moszoro, Marian (2014): Efficient Public-Private Capital Structures. Published in: Annals of Public and Cooperative Economics , Vol. 85, No. 1 (March 2014): pp. 103-126.


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This paper presents a rationale for hybrid public-private capital structures in public utilities. The public sector can borrow money cheaper, while private investors can spawn life-cycle cost savings. When investment vehicles enable the internalization of the financial advantage of the public sector and the managerial advantage of the private sector, a Pareto-efficient capital structure is achieved with both the public and private parties as shareholders. I show how different knowledge transfer schemes determine the optimal shareholding structure for the utility company.

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